Market watch: Budget anticipation leads to caution

Benchmark KSE-100 index gains 52.16 points.

KARACHI:

The stock market continued its bullish trend, but it was a volatile trading day as local investors remained cautious due to whispers surrounding the budget announcement.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 0.18% or 52.16 points to end at 29,789.85.

According to Elixir Securities analyst Faisal Bilwani, Pakistan equities traded volatile with late selling in broader market wiping morning gains.

“Higher than consensus CPI inflation for May at 8.34% year-on-year challenged the bull ride with locals leading the profit taking,” said Bilwani, adding that rumours of gas supply disruption put pressure on Engro Fertilizer (EFERT PA -4.72%), while holding company Engro Corporation (ENGRO PA -4.5) closed at day’s lower price limit.

“Cements, on the other hand, traded firm and led volumes with Fauji Cement Company Limited (FCCL PA +5.1%) hitting the upper price limit on bets of a hefty cash payout in coming earnings announcement while Lucky Cement Limited (LUCK PA +3.7%) also gained on reported foreigner buying.



‘Recent laggard Pakistan Telecommunication Company Limited (PTC PA +1.8%) traded highest volumes in six weeks to close green on local interest,” said Bilwani.

“With budget for FY15 due after trading hours, we expect the market to remain range bound with rumours and whispers over budget guiding direction along with flows,” said Bilwani, concluding that short term market trend will certainly depend on key issues to be addressed in the budget speech with decision on gains tax on equities the most important to look forward to.

Trade volumes fell to 270 million shares compared with Friday’s tally of 330 million shares.

Shares of 371 companies were traded on the first trading session of the week. At the end of the day, 174 stocks closed higher, 179 declined while 18 remained unchanged. The value of shares traded during the day was Rs13.3 billion.



Fauji Cement was the volume leader with 36.6 million shares, gaining Rs0.94 to finish at Rs19.32. It was followed by Lafarge Pakistan with 28.3 million shares, losing Rs0.18 to close at Rs14.71 and Maple Leaf Cement Factory Limited with 24 million shares, gaining Rs0.75 to close at Rs31.10.

Foreign institutional investors were net buyers of Rs1.07 billion during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, June 3^rd, 2014.

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