Market watch: Caution prevails but index closes higher

Benchmark KSE-100 index rises 307.19 points.


Our Correspondent June 23, 2014

KARACHI:


Amid political uncertainty, the index witnessed a cautionary day but ultimately closed higher.


The Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 1.07% or 307.19 points to end at 28,999.03 .

Elixir Securities analyst Jawwad Aboobakar said that stocks opened negative and traded volatile, with KSE-100 index falling 0.6%. “This was before the index witnessed recovery on the back of some political clarity mid day,” said Aboobakar. “This happened over successful negotiations and end of stalemate with the religio-political leader who arrived in Pakistan and is calling for a peaceful revolution.”

Aboobakar added that KSE-100 ultimately settled just below 29k with institutional buying witnessed in index names. “Pakistan State Oil (PSO) +3.35% rebounded after declining by over 11% in the last eight trading sessions, while MCB Bank (MCB) +2.17% also recovered in line with the market, along with Engro Corp (ENGRO) +2.23% that kept day traders busy.”



“The market will closely track developments on the political front while flows will set the tone as index hovers near 29k. As dust settles on the political front, we see earnings excitement to take the lead with index testing recent highs.”

Meanwhile, JS Global analyst Ovais Ahsan expects the market to recover in tandem with the cooling off of the political situation as Pakistan Petroleum’s secondary offering should invite investor interest following the successful off loading of the governments holding in UBL Bank.

“Oil and gas sector will continue to be in the limelight as global oil prices rally on the escalation of the conflict in Iraq and fears that the crisis may spill into other parts of the region threatening supplies from OPECs second biggest crude producer.”



Trade volumes rose to 133 million shares compared with Friday’s tally of 113 million shares.

Shares of 322 companies were traded on Monday. At the end of the day, 204 stocks closed higher, 89 declined while 29 remained unchanged. The value of shares traded during the day was Rs6.65 billion.

Fauji Cement was the volume leader with 15.6 million shares, gaining in 0.35 to finish at Rs19.79. It was followed by Lafarge Pakistan Limited with 14.74 million shares, gaining Rs0.45 to close at Rs15.14 and Bank of Punjab with 5.5 million shares, gaining Rs0.11 to close at Rs8.75.

Foreign institutional investors were net buyers of Rs160 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, June 24th, 2014.

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