Investors'' interest in buying stakes in Sui Northern Gas and Sui Southern Gas on Wednesday electrified the buying spree in gas and exploration scrips on Karachi Stock Exchange, which extended to other sectors, raising the KSE index by yet another 148 points.
Exploration and cement sectors emerged triumphant while the banking sector got battering due to profit taking. The market started on a bullish sentiment and the index remained in the positive territory throughout the day.
OGDC remained the volume leader and star performer of the day. The index giant posted increase of 2.8 percent to close at Rs 154.95, while PPL and POL increased by 1.9 percent and 1.2 percent. Suis were buoyed on the overwhelming interest shown by foreign and local parties in their privatisation. Both scrips closed limit up.
Buying spree was also witnessed in the telecom giant PTCL, and the scrip rose 3.2 percent to Rs 64.90. Cement scrips attracted investors as the ex-factory cement prices have been increased. D G Khan Cement, Lucky Cement, Fauji Cement and Maple Leaf Cement increased by 0.9 percent, 2.1 percent, 2.8 percent and 1.0 percent, respectively.
Noor Hameed, research analyst from Elixir Securities, said that the market was inspired by Statements of Qualification (SoQs) being issued by the Privatisation Commission for SNGPL and SSGC, and both Suis set the tone for the day hitting upper circuit breakers with punters jumping in on the privatisation infused fervour.
OGDC was again in the driving seat as rumours regarding new discoveries were rife once again giving the index an added doze of positive momentum taking other oil stocks to impressive intra-day highs.
"The market is due for correction, and we think that fresh investors should be patient and wait for the market to cool down, while profits should be booked especially in the oil sector which is prone to speculative overtures. We advise accumulation on dips in select stocks. Our picks are Lucky Cement, ICI, UNBL, MCB, NBP, ACBL & APL."
"Oil is man''s best friend," Ali Reza, research analyst at First Capital Equities, said. He said that eagerness in the E&P and cement sectors was based on the upward revision of the oil wellhead prices of Qadirpur field, of which OGDC and PPL would be the main beneficiaries.
"The development projects vis-à-vis infrastructure and dams along with strong export growth were fuelling a buying frenzy in DGKC, LUCK, POIC and MAFL. Benchmark-100, if compared to previous sessions, was less volatile and more towards accumulation of major blue chip stocks. Nonetheless, instability cannot be ruled out at higher levels. Therefore, fundamentally, stocks can be sought upon correction with profit and stop loss margin on mind with an eye on volatility."