Market watch: KSE bids the year farewell with 28% gain, volumes at nine-year low

Range-bound activity seen on last day of 2010,

KARACHI: The benchmark index at the country’s largest exchange recorded a gain of 28 per cent during the year, mainly on the back of foreign buying in the energy sector, according to analysts.

The 100-share index at the Karachi Stock Exchange (KSE) started 2010 at a little less than 9,400 points, while trading came to a halt as the board hit 12,022.46 points on Friday.

“During the outgoing year, foreign funds remained the most active participants at the bourse outpacing local players who had primarily been caught up with liquidity concerns – especially in the absence of a leverage product,” highlighted a report released by JS Global Capital.

Net foreign buying during the year stood at $522 million, according to the same publication. “One thing that was missing from Pakistan’s largest exchange in 2010 was volume,” stressed Mohammed Sohail from Topline Securities. The year saw trade volume decline to a nine-year low.

About 121.2 million shares were traded daily on average, down 29 per cent from the preceding year and about 47 per cent from the 10-year average of 221.2 million. The oil and gas sector emerged as the winner with returns of about 45 per cent (including dividends) in 2010. “Index gain was mainly driven by heavyweight Oil and Gas Development Company (OGDC). Its share in KSE-100 index has jumped to 25 per cent from 19 per cent at the start of the year,” added Sohail.

Last day of the year

Mixed performance was witnessed on the last trading session of the year and the index managed to close flat at 12,022.46 points after a decline of nine points, or 0.07 per cent.

“Late selling, mainly on profit-taking, trimmed early gains with the market slipping in the red before close,” commented Faisal Bilwani from Elixir Securities.

Shares of 381 companies were traded on the last trading session of the year. At the end of the day, 186 stocks closed higher, 177 declined and 18 remained unchanged. The value of shares traded fell slightly to Rs6.09 billion.

Active buying activity was witnessed in the Engro scrip on rumours of an earlier-than-expected declaration of commercial production of urea plant, according to Murtaza Jafar from JS Global Capital. “Foreigners were rumoured buyers in banking stocks, while locals were active in fertiliser and energy scrips,” he added.

Lotte Pakistan PTA led the market with 22.5 million shares traded. The scrip shed Rs0.1 to close at Rs13.7 per share.

Azgard Nine followed with a trade volume of 11.6 million shares. The Azgard scrip also fell by Rs0.18 to finish the day at Rs9.66. National Bank came in third – the bank’s stock strengthened by Rs0.76 to close at Rs76.82. “Continued buying interest was seen in the banking sector on expectations of healthy earnings and higher payouts,” commented Samar Iqbal, a local equity dealer.

Published in The Express Tribune, January 1^st, 2011.