Market watch: Index continues positive momentum

Benchmark KSE-100 index gains 68 points.

Our Correspondent May 19, 2014
Trade volumes fell to 111 million shares compared with Friday’s tally of 132 million shares. PHOTO: REUTERS/FILE


The market remained volatile within a small trading band as the first session after Saturday’s monetary policy announcement was one of consolidation.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 0.24% or 68.05 points to end at 28,951.38.

“Following the central bank’s decision over the weekend to keep benchmark interest rate unchanged at 10%, equities closed slightly higher in listless trading,” said Faisal Bilwani of Elixir Securities.

“Financials did attempt to buck the trend in broader market and generated volumes. However, in absence of clear direction, sector ended the day mixed.

“Most volumes were in small caps with bluechips mostly flows driven in absence of any triggers. Investor focus remains on upcoming budget with Capital Gains Tax increase or not, from 10% to 17.5% for holding of less than 6 months, the most crucial announcement to look forward to,” informed Bilwani.

“Engro Fertilizer (EFERT PA -1.6%) closed negative on news of diversion of gas to power sector to manage power cuts while K Electric (KEL PA -2.62%) led volumes and was down on profit taking after gaining 10% in last three trading sessions,” concluded Bilwani.

Meanwhile, according to JS Global analyst Ovais Ahsan, dividend plays were the flavour of the day as Fauji Fertilizer Company (FFC +1.0%), Hub Power Company Limited (HUBC +1.4%) and Pakistan Oilfields Limited (POL +0.7%) were amongst the gainers.

“The banking sector was led by MCB (MCB +0.8%) which is amongst the banks with a healthy investment in Pakistan Investment Bonds ideally positioned to weather a declining interest rate scenario,” said Ahsan.

“The directionless activity in the market today was also due to pre budget jitters as investors feared that the government could potentially raise taxes, introduce new ones and cease exemptions to increase revenue,” concluded Ahsan.

Trade volumes fell to 111 million shares compared with Friday’s tally of 132 million shares.

Shares of 350 companies were traded on the first day of the week. At the end of the day, 195 stocks closed higher, 133 declined while 22 remained unchanged. The value of shares traded during the day was Rs6.2 billion.

K-Electric Limited continued to be the volume leader with 6.4 million shares, losing Rs0.19 to finish at Rs7.07. It was followed by Byco Petroleum with 5.8 million shares, gaining Rs0.29 to close at Rs11.72 and Bank of Punjab with 4.5 million shares, losing Rs0.11 to close at Rs9.72.

Foreign institutional investors were net buyers of Rs382 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, May 20th, 2014.

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