Index gains 179 points on higher oil prices
KARACHI, Nov 5: Stocks ended on a 26-month high on Friday in healthy volume led by foreign buying, on cheap valuations, and the energy sector was in the limelight following a two-year high of international oil prices.
The Karachi Stock Exchange’s benchmark 100-share index ended 1.68 per cent, or 179.81 points, higher at 10,882, its highest close since August 2008.
Volume also rose to a six-month high as 195.22 million shares were traded, compared with 125.9 million traded on Thursday.
“Foreign investors are now chasing the Pakistan market that has not performed in line with regional markets,” said Mohammed Sohail, chief executive at Topline Securities Ltd.
Dealers said global oil prices hitting their highest intra-day level since October, 2008 at $86.37 also helped the positive sentiment.
The energy sector has the heaviest weightage on the KSE-index and Pakistan Oilfields Ltd (POL) rose 3.93 per cent to end at Rs256, while Oil and Gas Development Company gained 1.98 per cent to Rs158.15.
Dealers said investors were awaiting the outcome of meetings with the International Monetary Fund, to discuss the possible release of the sixth tranche of an $11 billion emergency loan agreed in November, 2008. Policy level meetings resumed on Friday.
Pakistan is coming under more pressure in talks with the IMF to implement a reformed general sales tax (RGST) as Islamabad attempts to secure the sixth tranche of an $11 billion emergency loan that has kept its economy afloat.
In the currency market, the rupee ended firmer at 85.27/32 to the dollar, compared with Thursday’s close of 85.59/65 because of fresh inflows of dollars in the market, despite a rise in international oil prices, dealers said.
“There was an increase in remittances from overseas Pakistanis which helped strengthen the rupee,” said a currency dealer.
In the money market, overnight rates ended between 11 per cent and 11.50 per cent, compared with Thursday’s close of between 11.50 per cent and 12 per cent.
The State Bank of Pakistan injected Rs9.7 billion ($113.7 million) worth of government paper on Friday at 12.27 per cent in seven day reverse repo contracts.—Reuters