Market watch: Index recovers to end marginally positive

Benchmark KSE-100 index gains 65.29 points

KARACHI: After a plunge that saw the index lose close to 300 points in the first half hour of the day, Pakistan equities posted a slight recovery to end marginally positive as institutional buying helped the ride up.

At close on Monday, the Karachi Stock Exchange’s (KSE) benchmark 100-share index rose 0.20% or 65.29 points to end at 32,826.24.

Elixir Securities analyst Faisal Bilwani said the benchmark KSE-100 index opened gap down, losing near 1% at open while the wider market traded directionless on thin turnover.

“However, reported institutional buying in index names and bargain hunting in small and mid-caps from retail investors pushed broader market in green zone at close.



“Financials namely Habib Bank Limited (HBL PA +2.4%) and United Bank Limited (UBL PA +2.5%) were up on thin volumes, while cements also gained mid-day ahead of DG Khan (DGKC PA +1.2%) FY15 earnings that were announced later beating estimates.

“We see volatile trading with volumes somewhat improving while benchmark KSE100 is likely to retest and sustain 33k ahead of long Eid holidays,” said Bilwani, adding that cements, financials and fertilisers look ripe for cherry picking while small and mid-caps may offer good trading opportunities.

Meanwhile, JS Global analyst Arhum Ghous said volatility prevailed at the bourse as it made a low of -287 points before bouncing back to make a high of 82 points and closing at +65 points with dull volumes amidst roll-over week.



“In cement sector, DG Khan Cement spiked up 1.2% after the company announced its yearly financial result (Earnings per share Rs17.42) beating JS expectation of EPS Rs15.2 due to improved gross margin, lower selling and distribution cost and higher portfolio income.

“Oil sector continued to remain under pressure as PSO, OGDC, POL closed -1.13%, -1.76% and -0.73% respectively.”

“Textile sector remained depressed as cotton arrival numbers nosedived by 20%YoY,” said Ghous.

Meanwhile, Abbasi Securities’ analyst Mohsen Siddiqui said volumes are expected to pick up post-Eid holidays. “We expect market to recover as the recent positives - decline in SBP Policy rate, status-quo decision by the Federal Reserve and continuing decline in energy prices - have not been priced in,” said Siddiqui.

Trade volumes declined to 105 million shares compared with Friday’s tally of 123 million shares.

Shares of 336 companies were traded on Monday. At the end of the day, 141 stocks closed higher, 172 declined while 23 remained unchanged. The value of shares traded during the day was Rs4.8 billion.

TRG Pakistan Limited was the volume leader with 9.3 million shares, gaining Rs1.25 to finish at Rs31.87. It was followed by Pak Elektron with 8.7 million shares, gaining Rs1.82 to close at Rs72.91 and K-Electric Limited with 6.4 million shares, losing Rs0.06 to close at Rs7.14.

Foreign institutional investors were net sellers of Rs16.6 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, September 22^nd, 2015.

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