Market watch: UBL share float lifts Karachi bourse

Benchmark KSE-100 index rises 242.58 points.

KARACHI: With the UBL book-building process in the limelight, bulls remained in charge of the bourse on Wednesday as the KSE 100-share index gained significant ground.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 0.82% or 242.58 points to end at 29,783.30.

Elixir Securities analyst Faisal Bilwani said Pakistan equities closed higher on buying by foreigners and excitement over offloading of government holdings in United Bank Limited (UBL), which rose 2.26%.



“After a gap of more than seven years since any large divestment, the government is offloading residual holdings in UBL,” said Bilwani. “Confirmation that the entire offer block (248m shares) including upsize option was filled in the first few hours of book-building at the floor price (Rs155 per share) brought fresh liquidity in the broader market with locals optimistic over foreign flows.”

According to Bilwani, Oil and Gas Development Company (OGDC + 1.5%) which would have a global depository receipt (GDR) issue in the coming months, gained on the last day of the trading spot.

Additionally, Lucky Cement closed at a record high above Rs400 per share as the market expected a hefty payout and strong earnings growth in the coming results season.

Pakistan Telecommunication Company (PTCL +5%) closed at its upper price limit and at levels last seen in late April on talk that the issue of transfer of properties would be resolved before the end of current fiscal year.

Bilwani concluded that he expected the broader market to test new highs above 30,000 in the days ahead with financial institutions seeing interest post-UBL share sale, while energy and cement companies would also attract attention and gain on institutional buying.



JS Global analyst Fahad M Ali pointed out that the cement sector performed well on the back of approval of Dasu Dam project by the World Bank. Other than cement, Ali said, third-tier stocks led the volumes with TRG World and Lotte Chemical Pakistan Limited leading the list.

Trade volumes rose to 289 million shares compared with Tuesday’s tally of 232 million shares.

Shares of 373 companies were traded during the day. At the end, 208 stocks closed higher, 135 declined while 30 remained unchanged. The value of shares traded was Rs12.8 billion.

TRG Pakistan Limited was the volume leader with 28.06 million shares, gaining Rs1 to finish at Rs16.38. It was followed by Lotte Chemical with 18.9 million shares, gaining Rs0.26 to close at Rs7.96 and PTCL with 17.5 million shares, gaining Rs1.47 to close at Rs30.96.

Foreign institutional investors were net buyers of Rs385 million worth of shares during the trade session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, June 12^th, 2014.

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