The bull-run continued on Karachi Stock Exchange on Wednesday on the back of strong fundamentals, foreign interest and institutional buying and the KSE-100 index breached the level of 13,300 points, hitting 13,334.30 points intra-day high. But late profit taking trimmed the gains to 45.28 points and the index closed at 13,212.05 points level.
The other KSE-30 index closed at 16,748.49 points level, marginally down by 4.06 points. The start of the market was positive and the bulls gradually strengthened their positions. However, the index witnessed resistance in the end of the session.
The market witnessed heavy trading activity and the ready market volume increased to 464.543 million shares from 394.740 million shares of Tuesday. The futures market turnover also increased to 97.240 million shares against 81.258 million shares changed hands previously.
The overall market capitalisation surged by Rs 13 billion to Rs 3.840 trillion. Trading took place in 386 scrips, out of which 186 scrips closed in negative column and 157 scrips closed in positive column while the value of 43 scrips remained unchanged. OGDC was the star performer with 74.859 million shares and surged by Rs 1.05 to close at Rs 123.65.
The banking sector performed well as Askari Bank, NBP and Bank Al Falah gained Rs 2.45, Rs 3.95 and Rs 0.85 to close at Rs 101.65, Rs 264.80 and Rs 55.40, respectively. However, BoP lost Rs 2.10 to close at Rs 113.80.
Profit taking was witnessed in cement sector, as a result of which DG Khan Cement and Lucky Cement lost Rs 0.30 and Rs 1.45 to close at Rs 114.45 and Rs 111.80, respectively. In the top ten volume leaders, Nishat Mills lost Rs 1.20 to close at Rs 127.05, TRG declined by Rs 0.90 to close at Rs 12.20 and Fauji Fertiliser Bin Qasim decreased by Rs 0.45 to close at Rs 37.50.
Rafhan Maize and Bata (Pak) were the highest gainers which gained Rs 40.00 and Rs 14.85 to close at Rs 2040.00 and Rs 311.90 respectively. Sanofi-Aventis and Jah Siddiq Co were the highest losers which lost Rs 14.50 and Rs 10.65 to close at Rs 286.60 and Rs 305.00 respectively.
Ahsan Mehanti at Shehzad Chamdia Securities said that positive sentiment prevailed at the market which ultimately closed in the green. The news regarding privatisation of PSO and launching of GDRs of NBP and UBL within current fiscal year invited fresh buying.
The news that the privatisation of NIT would be made by the end of current fiscal year or in the beginning of next fiscal year was also a positive signal for investors to take fresh positions. The revised fair value of OGDC by CitiCorp was another positive sign for related stocks, especially in OGDC which was the volume leader. Foreign investors remained active in banking sector and the SCRAs balances were expected to reach the new high of $850 million.
Hasnain Asghar Ali at Aziz Fidahusein Securities said that confirmation by the privatisation authorities regarding PSO's bidding boosted the market participants' confidence, thereby allowing the bull-run to continue. The pre-budget rally, backed by fundamentals and growth stories, continued despite unfavourable leverage environment.
Although the start of the market was a bit nervous, stability in oil prices in international market invited aggressive buying in the oil and gas exploration stocks, while growth stories fuelled buyers in the leading cement stocks. Buying in the low-price banking stocks allowed the market participants swapping options. The thrill and adventure allowed the KSE-100 index to continue the record-breaking spree and an intra-day high of 13332, with plus 165 points, was registered.
The surge was resisted as the capped CFS forced the excited participants to hold their horses. The slump was big as it led to wiping off the entire gains. The low of 13,146 meant that the index adjusted by 185 points. The tempting stocks did find buyers and the index staged a handsome recovery and closed well above 13,200 and achieved the record high (on closing basis).
The reason that the adjustment was huge was mainly the fact that this time the punters dared the high float and under-valued OGDC. Despite capped CFS, this was certainly an uphill task. Luckily, the punters got institutional support, and the dead horse was finally prepared for a race.
Having high weight in the KSE-100 index, the bull-run may allow the KSE-100 index more gains. Caution is, however, advised as CFS cap may be exploited as the bears are likely to influence the bulls by circulating negative rumours regarding the salient features of the upcoming spell. It is, therefore, recommended to opt for profit taking in expensive stocks while buying is recommended in the stocks trading at comparatively low PE. Intra-day dips can, therefore, by capitalised. Technically, the index will continue to face resistance around 13327-13333, while immediate support stays at 12977-12983.