Discount rate cut expectations push KSE index higher

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KARACHI: The Karachi Stock Exchange’s (KSE) benchmark 100-index witnessed historic session and surged by 148.85 points to a new all-time high of 16,824.55 points on Thursday against the previous high of 16,675.70 on increased interest of investors in leading stocks, said dealers. Ahsan Mehanti, an analyst at Arif Habib Corp, said that the index closed at record high amid higher trades with investors’ interest across leading sectors on the hopes for a rate cut in the upcoming monetary policy announcement by the State Bank of Pakistan.

Higher global commodities, higher cement sales data, rising urea and DAP off-take for November and improved textile sector valuations on the export relaxations by the European Union played a catalyst role in the bullish sentiment despite concerns over fall in the rupee-dollar parity affecting foreign inflows at the KSE, he said.

The KSE-100 index rose by 148.85 points, or 0.89 percent to 16,824.55 points against 16,675.70 points recorded in the last session. The index, at one time, reached a high of 16,841.52 points during the intraday session, while the low level of the day was recorded at 16,675.70 points. The KSE-30 index improved by 134.03 points, or 0.99 percent, to 13,637.68 points.

Along with the index, turnover and value both increased during the session. The turnover was higher by 23 million shares to 257.72 million shares from 234.13 million shares, whereas value also increased to Rs6.86 billion from Rs5.61 billion.

Hasnain Asghar Ali, chief operating officer of Escorts Capital, said fresh flows in the banking and fertiliser stocks kept the benchmark gaining grounds that was secured by cement and other stocks having exposure due to cross holdings in the incoming company in the fast moving consumer goods (FMCG) sector, although volumetric contribution of the KSE-100 companies did stay on the lower side, low-priced stocks from almost all the sectors made substantial volumetric contribution.

“Besides keeping the turnover above 250 million shares, the activity provided ample opportunities to the day traders, wherein renewed buying in some seems justifiable due to growth, expansion, turnarounds and strategic actions,” he said.

Renewed buying on short- and long-term perspective in the frontline stocks carrying values from local and offshore circuits stayed prominent, since various stocks are way below the historic levels, despite growth in earnings, payouts and much improved infrastructural support, monetary policy announcement has; however, restricted trading activity in the front-liners,” he said.

Samar Iqbal, an equity dealer at Topline Securities (Pvt) Ltd, said that after several months, the MCB Bank with a gain of five percent helped the index see new high. “Pakistan International Airlines also saw increased activity as investors’ expect government to pump in more money in the loss-making company. Lucky and DG Cement also witnessed fresh buying after remaining dull for the last few sessions,” she said.

Highest increase was recorded in the shares of Unilever Pakistan, which increased by Rs149.89 to Rs9,953.45 per share followed by Unilever Food, which rose by Rs100 to Rs4,290 per share. Major decline was witnessed in the shares of Bata (Pak), which fell by Rs50.67 to Rs1,599 per share followed by Indus Dyeing that declined by Rs22.87 to Rs567.13 per share.

Stocks that recorded significant turnover included Byco Petroleum, Fauji Cement, PIAC, PTCLA and Lotte Pak PTA. Byco Petroleum was the volume leader with a turnover of 23.77 million shares on an increase of 99 paisas to Rs11.66 per share followed by Fauji Cement with a turnover of 16.21 million shares on a decline of two paisas to Rs6.80 per share. Shares turnover in the futures market rose to 13.89 million from 10.23 million shares traded in the previous session. Of 386 companies’ stocks traded, 256 advanced, 115 declined and 15 remained unchanged.

Unilever Pak Rs149.89
Closing Rs9,953.45

Unilever Foods Rs100.00
Closing Rs4,290.00

Bhanero Tex Rs13.27
Closing Rs278.77

Bata Pak Rs50.67
Closing Rs1,599.00

Indus Dyeing Rs22.87
Closing Rs567.13

Wyeth Pak Rs18.50
Closing Rs916.00

Courtesy: The Nation

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