Market watch: Discount rate cut takes index to another high

Benchmark KSE-100 index increases 358.72 points.

KARACHI: Spurred by the cut in discount rate, the index opened positive on the first trading session of the week and ended above the record 31,700-point level.

At close, the Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 1.14% or 358.72 points to end at 31,702.79.

“Broader market gained on institutional and retail buying as lower benchmark interest rate helped textiles, cements and yield plays while select banks namely MCB Bank (MCB PA +3.3%) and United Bank (UBL PA +1.1%) were up on expected gains from debt market portfolios,” said Faisal Bilwani of Elixir Securities.



“Oils were mixed with the exception of Pakistan State Oil (PSO PA +3%) that closed higher on hopes that cheaper crude will help ease the energy sector’s circular debt, however, the company does remain exposed to inventory losses in the ongoing quarter.

“We expect volatile trading with the benchmark KSE-100 seeing resistance near 32k on profit-booking led by institutions. We like NML, ENGRO, PPL, EFERT, DGKC at current levels,” he suggested.

Meanwhile, JS Global analyst Fahad M Ali said the rally was seen across the board where textiles, cements and fertiliser sectors were the leaders. “We expect the market to remain in the bull zone and break new highs in the coming sessions,” he said.

Trade volumes rose to 276 million shares compared to 235 million on Friday.

Shares of 414 companies were traded on Monday. Of these, 178 companies declined, 215 closed higher while 21 remained unchanged. The value of shares traded during the day was Rs15.7 billion.



Jahangir Siddiqui and Company was the volume leader with 19.9 million shares, gaining Rs1 to close at Rs14.71. It was followed by Maple Leaf Cement with 19 million shares, gaining Rs1.6 to close at Rs33.73 and Pak Elektron with 13.3 million shares, gaining Rs1 to close at Rs30.7.

Foreign institutional investors were net buyers of Rs128 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, November 18^th, 2014.

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