Index gains 336.27 points

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The Karachi Stock Exchange (KSE) witnessed a bullish trend during the last week ended on Friday and overall the benchmark KSE-100 index gained 336.27 points to close at new high level of 16,573.86 points from 16,237.59 points.
Analysts said that during the last week local and foreign investors were remained optimistic and traded aggressively, in cement, textile, banking and food sector, which pushed the market toward another new high level. They said that monetary easing reports have also put positive impact on the stock market. The market is expecting another 50-100 basis points cut in key policy rate in the upcoming monetary policy, likely to announce in the second week of December 2012.

"In anticipation of lower inflation for November 2012 and further monetary easing kept local bourse in the bull run", said Samar Iqbal, an analyst at Topline Securities.

She said that investors were remained bullish in cement stocks while textile sector also joined the bandwagon as investors are hoping better earnings of the sectors amid better margins.

Commenting in the buyback announcement from Unilever management, she said that this announcement has brought the stock in limelight as investors anticipating the deal to be struck at a higher level.

At the same time, investors' interest was also seen in other consumer stocks like Nestle and Engro Foods as the year end approaching near. In addition, renewed interest in banking sector was also seen, she said.

Week-on-Week (WoW) basis, the benchmark KSE-100 up by 2.1 percent, while average volumes also showing a healthy rise of 37 percent to Rs 6.3 billion from Rs 4.61 billion. Investors took more interest in the cement, banking and textile sectors due to their expected improved financial results. Trading activity was remained higher side during the week and with an increase of 15.5 percent, daily volumes surged to 291.8 million shares compared to previous week's average volume of 252.673 million. Total market capitalisation gone up by Rs 80.781 billion to Rs 4.152 trillion from Rs 4.071 trillion a week earlier. The foreign investors' interest was also positive and they bought shares worth $6.7 million as against $5.7million last week.

All through the week, the market witnessed positive trend and first trading day KSE-100 gained 32.89 points to close at 16, 270 points. On Tuesday, the share market continued to show a positive trend and KSE-100 index close at new peak of 16,364.77 points, up by 94.29 points.

On the back of massive buying by local and foreign investors in cement and banking sector, on Wednesday the benchmark KSE-100 index surged by 59.26 points to close at 16,424.03 points. The Karachi stock market continued to set new records and on Thursday KSE-100 index closed at 16,527 points, up by 103.05 points.

On Friday, led by oil and banking stocks, KSE-100 index gained 46.78 points to close at another high level of 16,573.86 points.

De-listing of Unilever Pakistan shares from Karachi, Lahore and Islamabad stock exchange was hot news during the last week. Unilever's majority share holders have announced to buy-back Unilever Pakistan Shares and formally sent written information to all three bourses.

Unilever has applied for voluntary de-listing from Pakistan's equity markets and suggested a minimum share price of Rs 9,700 per share to buy-back all its shares from the investors in stock markets. However, the Managing Director Karachi Stock Exchange has said that so far formal de-listing application has not received. He said that there is a provision of de-listing, however we will protect investors and a committee will negotiate with Unilever to determine a valuation of share, when formal application will be received.

Furqan Ayub, an analyst at JS, said that sentiment at the local bourse remained positive last week, shored by anticipation of further easing in the upcoming monetary policy and positive news, particularly in the consumer space.

While second and third tier stocks were in the spotlight, key sectors like cement (on the back of higher cement prices), textiles (weakening PKR-US$ exchange rate, resulted higher margin), and banks (expectations of 100bp rate cut in December 2012 losing steam and consensus now eyeing a 50bp cut) were also in focus, he added.

On the macro front, the country's forex reserves fell to $13.58 billion on account of IMF loan repayment while last week's T-bill auction saw yields inch up slightly (up 1-5bps).

Analysts said that Lahore High Court's (LHC) order to construct Kalabagh Dam has also put positive impact on stock market as investors are expecting massive increase in domestic cement sales in future.

Courtesy: Business Recorder


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