KARACHI – The local bourse posted meager gains amidst thin volumes owing to heavy investor interest in the banking sector lead by UBL. The KSE 100 Index ended the day up 38 points, aided by renewed local buying interest in banking stocks.
UBL stole the show after disclosing to the stock exchange that Bestway (Holding), an existing shareholder, entered into a Share Purchase Agreement (SPA) with the Abu Dhabi Group (ADG) to acquire 20 percent of their stake in UBL. The KSE 100 index closed at 1886.02 with the gain of 37.97 points, while total volume stood at 82,165,656 along with the total value 3,941,644,403.
UBL hit its upper limit for the day as rumors of a possible tender gripped the market hinting at a higher price. ABL and NBP jumped 4.7 percent and 1.5 percent respectively, over local institutional interest. FFC was highly sought after news that the company following Engro’s precedent of raising urea prices by Rs190/bag. Engro slipped a further 1.5 percent, despite informing the stock exchanges that it has started trial production at its new fertiliser plant.
Crude oil prices are hovering around $91 per barrel also encouraged the interest of investors in the oil and gas sector as most of the bellwether stocks closed in the green zone. Local benchmark index closed at 11,886 after posting meager gains of 38 points with lackluster volumes of 99 million shares traded.
Chemical sector continue to make advancements lead by FFC and ICI. Local benchmark index may witness new peaks with in upcoming year albeit with minor hiccups as global recovery drive commodity prices whilst resilience of local corporate continues despite economic upheaval.
Range-bound activity persists in the local equity markets, although various main board stocks did show decent openings. Prolonged stagnation, rollover pressure and lack of investor activity made low volume price erosion a prominent feature during the trading session.
The dips in dividend yielding stocks continued to generate fresh funding, both from corporate and retail sections. The poor activity was restricted to the banking sector, since low volumes on various fronts prevented the contagion spreading to the wider market. The environment prevents any long-term predictions even in fundamentally strong stocks.
Hasnain Asghar Ali, a market expert, said that the high turnover will continue to provide short-term trading opportunities for local financial groups and holding companies through both local and offshore accounts.
