Market watch: With army in the limelight, stocks post hefty gains

Benchmark KSE 100-share index advances 793 points.

KARACHI:

The stock market rebounded in an impressive rally on the last day of the week as investors cheered positive developments on the political front with the army stepping in to defuse an unending crisis.

At the close of trading on Friday, the Karachi Stock Exchange’s (KSE) benchmark 100-share index recorded a sharp rise of 2.86% or 793.31 points to end at 28,567.74.

In line with the index gains, trading volumes also swelled 62.3% with 77% of the companies traded during the day closing higher.

The major recovery eclipsed most of the week’s decline as the index reached near the Monday’s close at 28,519.34 points.

It came in the backdrop of a hefty fall of 1,310 points (4.02%) on August 11 – the KSE-100’s worst single-day performance in terms of points.



Commenting on the market’s turnaround, Elixir Securities analyst Faisal Bilwani said with fears of unrest averted, stocks opened up and index names generated volumes on institutional interest.

However, the second half brought volatility as the government denied having invited the army to tackle the crisis and blamed the protesters for involving the military in political affairs.

“Investor panic soon subsided with the market managing to close up 2.9% with heavyweights like OGDCL, MCB, UBL and K-Electric providing help and also topping the volume charts,” said the analyst.

He expects the equities to continue tracking developments on the political front as stakeholders could sign an agreement this weekend, ending the two-week-long stalemate.

“Barring negative surprises, we see the market to recover the lost ground and test 30k in coming days,” he said.

JS Global analyst Muhammad Mobeen, in his report, said he believed that political uncertainty still persisted, where any outcome was possible so investors should be cautious and wait for a dip to accumulate positions in high dividend-yielding stocks.

Trade volumes surged to 187 million shares compared to Thursday’s tally of 115 million.



Shares of 342 companies were traded during the day. Of these, 54 companies declined, 265 closed higher while 23 remained unchanged. The value of shares traded during the day stood at Rs9.8 billion.

K-Electric was the volume leader with 22.5 million shares, gaining Rs1 to close at Rs7.71. It was followed by The Bank of Punjab with 14.5 million shares, gaining Rs0.15 to close at Rs8.06 and Lafarge Pakistan with 10.8 million shares, gaining Rs0.38 to close at Rs15.48.

Foreign institutional investors were net buyers of Rs1 billion worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, August 30^th, 2014.

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