Stocks add 58 points to overnight rally
KARACHI, July 3: Shares on the Karachi stock market extended Monday’s phenomenal gains of 342 points by the addition of 57.87 points on Tuesday. The KSE-100 index closed at 14,200.79 points.
The aggregate gain of 2.88 per cent in two days was about a third of the gains accrued in full financial year 2012.
But some market participants thought that the performance of the KSE-100 index did not portray an accurate picture of the market as heavyweight stocks could easily tilt the balance either way.
Oil and gas sector giant OGDC, with a weightage of over 20 points for a rupee, rose by Rs2.39, which some thought could have contributed over 40 points to the index rise. But there could be some genuine reasons for investors to be bullish on the capital market.
The surge in international stocks and commodities markets and the hopes of progress on US talks with Pakistan on the opening of the Nato supply routes were thought to be triggers. Foreign investors who may be allocating funds for regional equity markets were again on the buy side on Tuesday with net purchases of $2.25 million worth stocks.
Some analysts thought that investors may be collecting high dividend yielding shares ahead of the upcoming results season, particularly as corporates disburse dividends in the fourth quarter.
Ahsan Mehanti at Arif Habib Corp said that stocks finished higher though profit-taking was also seen side by side. Investor interest was prominent in blue chip stocks ahead of earning announcements due next week.
Recovery in global stocks and commodities and expectations of continued inflow of foreign portfolio investment played a catalyst role in bullish sentiments.
Hasnain Asghar Ali commented that the local participants continued to accumulate front line stocks. Relatively high volatility was witnessed during the trading session but the presence of renewed interest kept the volume ticking. Local investors searched for safer bets for both short term trades and portfolio investments.
Improved values offered wide spread opportunities for stock and sector swapping that was prominent mainly in cement and fertiliser stocks. The losses in some issues were off-set by gains in others on improved volume.
The analyst observed that besides contributing substantially to the overall turnover, the strategy increased the number of companies that came up for active trading.
Low multiples and high yields at the KSE would keep the liquidity poised towards local equities and the likely improvement in volumes would continue to invite day traders for short term bets, analysts said.On the news front, revenue collection at the customs stage was noted to have increased by 31 per cent to Rs685 billion for the ongoing fiscal year, compared to collection of Rs523 billion last year.
Also the State Bank of Pakistan was said to have estimated that $630 million could be generated from the auction for 3G licences to support external and fiscal deficit.
Turnover rose by 12 per cent to 119 million shares, from 106 million shares on Monday, but the trading value declined by 8 per cent to Rs4.566 billion, from Rs4.943 billion. Market capitalisation rose by Rs15 billion to Rs3.616 trillion.
The volume leader was D.G. Khan Cement which declined by 20 paisa to Rs41.08 on 12m shares. It was followed by PTCL up 26 paisa to Rs14.60 on 11m shares, Jah Sidd Co adding 14 paisa to Rs13.55 on 10m shares, Fauji Cement higher by 16 paisa to Rs5.90 on 8m shares, Fauji Fertiliser up by 34 paisa to Rs114.28 on 7m shares and Dewan Cement gaining 52 paisa to Rs4.14 on 7m shares.
Engro Corporation up by Rs1.45 to Rs105.03 on 5m shares, Lafarge Pakistan stronger by 27 paisa to Rs4.73 on 5m shares, Lucky Cement up by 63 paisa to Rs120.21 on 4m shares and Engro Foods declining by 39 paisa to Rs65.08 on 4m shares.