Stocks inch up

Amid dull volume, the Karachi share market managed to settle in the green zone Thursday with KSE-100 index gaining 18.74 points to close at 32,617.74. "Stocks showed recovery amid speculations ahead of monetary policy announcements on May 23 led by leveraged second and third-tier stocks," viewed Ahsan Mehanti of Arif Habib Corp. The trading turnover at the ready-counter was recorder lower at 80.34 million shares compared to 135.62 million of the previous trading session.
Arhum Ghous of JS Global saw lack of activity throughout the day. "Investors remained largely on the sidelines due to the upcoming budget," she said, adding that the market participants remained sceptical of the budget as the government hinted towards imposing an extra total of Rs 200 billion in taxes on areas beyond the current tax net. The traded value also shrank to Rs 3.93 billion from Wednesday's Rs 7.26 billion. Of the total 336 scrips traded, only 148 posted gains, a majority 159 lost their worth while 29 remained unchanged.
The market capitalisation depleted to Rs 7.099 trillion. The foreign portfolio investment, however, ended up in the positive territory marking a net buying of $378,937. Pak Refinery, though decreased to Rs 38.50, led the day's volume with 7.25 million of its listed stocks changing hands. Other best performing issues were Pak Elektron 4.7 million, Byco Petroleum 4.1 million, PIA 3.8 million, Pakistan International Bulk Terminal 3.4 million, PTCL 3.3 million, Jahangir Siddiqui Company 3.2 million, Habib Bank 2.8 million, Fauji Cement 2.5 million and Bank of Punjab 2.3 million shares.
The futures trade also moved down to 6.5 million contracts against 13.38 million of earlier session. The banking stocks remained weak on what Mehanti said expected cut in the State Bank's policy rate. "Falling government bond yields and recovery in global crude oil prices played a catalytic role in the bullish activity," he added. JS analyst Arhum observed that textile and fertilizer sectors were pressured by the enactment of GIDC Act as was evident from the fall of EFERT, FATIMA and ENGRO. The widely-expected discount rate cut, she said, had failed to provide any trigger to the market as highly-leveraged cement stocks stayed under pressure with DGKC, FCCL and LUCK ending in the red. The banking sector is bound to feel the heat of a likely monetary easing. "Investor interest remained mixed with lacklustre volumes," Arhum said.