Index gains 150.48 points

A surprise cut in interest rate and healthy corporate results on Monday invited aggressive buying on the Karachi share market and the benchmark KSE-100 index surged by 150.48 points to close at 14,911.97 points. Fresh buying was seen mainly by local retail investors and institutions while the foreign investors also remained net buyers of shares worth dollars 0.88 million.
The market opened on a strong positive note and the index hit 14,938.67 points intra-day high. The index remained in positive throughout the session. Trading activities improved significantly due to aggressive participation of local retail investors and the volumes at ready counter increased to 195.084 million shares as compared to 37.629 million shares traded on last trading session.
Total market capitalisation increased by Rs 38 billion to Rs 3.805 trillion. Of the total 298 active stocks, 187 closed in positive and 91 in negative while the value of 20 stocks remained unchanged. KESC was the volume leader with 19.577 million shares and gained Re 1.00 to close at Rs 5.27.
In the cement sector, DG Khan Cement, Fauji Cement, Maple Leaf Cement and Lafarge Pakistan increased by Rs 2.04, Re 0.21, Re 0.25 and Re 0.05 to close at Rs 49.17, Rs 6.20, Rs 7.79 and Rs 4.65 with 17.637 million shares, 13.346 million shares, 10.357 million shares and 6.576 million shares respectively. In banking sector, Bank Al Falah and Askari Bank declined by Re 0.61 and Re 0.22 to close at Rs 16.99 and Rs 14.55 with 14.662 million shares and 5.967 million shares respectively. Azgard Nine gained Re 0.71 to close at Rs 6.51 with 9.034 million shares. Jahangir Siddiqui Co inched up by Re 0.55 to close at Rs 15.54 with 8.929 million shares. Nishat Mills surged by Rs 2.60 to close at Rs 56.01 with 8.215 million shares.
Colgate Palmolive and Bata (Pak) Limited were the top gainers increasing by Rs 45.57 and Rs 34 to close at Rs 1,359 and Rs 750 respectively, while Unilever Food and Indus Motor Company were the top losers declining by Rs 75 and Rs 6.26 to close at Rs 2,750 and Rs 260.75 respectively. Muhammad Sohail, leading analyst said that the Karachi bourse market cap crosses dollars 40 billion mark after higher than anticipated rate cut by the State Bank of Pakistan.
He said high debt firms and dividend yielding stocks rallied. Breaching 15,000 points would be a major milestone for the market, he added. Hasnain Asghar Ali at Escorts Capital said the surprised by the degree of rate cut indeed kept the buoyant participants in search of fresh bets with risk free rate of return dwindling fast even the institutional participants were aggressively searching for high yielding and consistent stocks for placements, adding to the spice was high stock and cash dividend announcement by PPL, thus providing all the right ingredients for a 15,000 benchmark.
He said value erosion in banking stocks mainly due to sector swapping did offer resistance to the sentiment that was otherwise all set to hit the psychological level, rise in turnover has indeed been more soothing for the participants rather then the numbers on the benchmark.
Along with E&P, the highly leveraged stocks mainly from cement, textile and fertiliser sectors led the way, stocks offering consistency in growth, in earnings and payouts continued to attract liquidity now even being diverted from fixed income, although the frontline banks did face massive sell-off deeper discounts did invite renewed buying interest, substantial rise in volume and value of trade despite political volatility clearly indicates eagerness mainly by the local participants of making fresh bets at the local equities, offering high yields and trading at low multiples, he said.
With rise and shine likely to continue, due to improved infrastructure both on external and internal fronts, it is recommended to accumulate stocks trading with dividend top-ups and carrying the potential of trading with improved multiples for both trading and placements, however stocks likely to struggle due to supply cuts and ballooned circular debt can be looked for off-loading on speculative spur, he added.