Market watch: Index bounces back as week ends

Benchmark index gains 348.64 points.

Our Correspondent March 20, 2015
Benchmark index gains 348.64 points. PHOTO: AFP

KARACHI: The index bounced back on the last trading day of the week, ahead of the monetary policy announcement where consensus and debt market indicates a minimum of 50bps rate cut.

At close, the Karachi Stock Exchange (KSE)-100 Index rose 1.11% or 348.64 points, to close at 31,800.25.

“Almost all cement stocks gained with Maple Leaf (MLCF PA +5%) ending on its respective upper lock while Fauji Cement (FCCL PA +4.8%) also closed near limit,” said Elixir Securities analyst Sibtain Mustafa.

“On the contrary, banks continued to nose dive with MCB Bank (MCB PA -5%) closing at lower price limit on heavy volumes likes of which was last seen in April 2014.

“Outlook for banks continues to stand bleak as declining interest rate scenario puts pressure on NIMs and resultant lower earnings per share expectations.

“The overall market tested 31,900 levels on marginally higher volumes led by fertiliser, pharma and cements.”

Sibtain said that the recent plunge of more than 9% from January’s highs and Friday’s resultant bounce can be termed as a dead cat bounce.

“However, with fundamentals remaining intact (macros positive and EPS growth intact for more than 70% of KSE100 index companies) the decline in momentum can find its bottom near 31,500 to 31,000.”

He said that any negative development on the political front can be termed as an opportunity to buy as medium term horizon holds bullish.

Trade volumes rose to 141.8 million shares compared to 107 million on Thursday.

Shares of 340 companies were traded on the last trading session of the week. Of these, 84 companies declined, 241 closed higher and 15 remained unchanged. The value of shares traded during the day was Rs9 billion.

Fauji Cement was the volume leader with 11 million shares, gaining Rs1.41 to close at Rs30.77. It was followed by Pak Elektron with 10.9 million shares, gaining Rs2.41 to close at Rs50.68 and Bank of Punjab with 9.2 million shares, gaining Rs0.60 to close at Rs9.96.

Foreign institutional investors were net sellers of Rs89.6 million during the session, according to data maintained by the National Clearing Company of Pakistan.

Published in The Express Tribune, March 21st, 2015.

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