KARACHI – The local bourse exhibited stimulated activity backed by news regarding approval of the margin trading system by KSE board. However, volumes stayed shabby, depicting investor’s confidence. The KSE-100 index gained 131.75 points and closed at 12,077.84 levels, while the total volume stood at 63,659,526 along with the total value of 3,143,336,221.
The KSE-30 index accumulated 142.40 points and closed at 11688.94 levels, while the all share index closed at 8425.19 levels after gaining 91.07 points. Foreign investment stayed absent as the index weighted top tier stocks contributed towards the bullish sentiment, lead by the index heavy weight OGDC. Head of Research at Habib Metropolitan Financial Services Bilal Asif stated that uncertainties especially in relation with US-Pak ties prevail, hence prudence needs to be in place before making any investment decision.
Market analysts believe that there is still a long way to go before the MTS becomes fully operation and gets implemented. Speculative buying sparked across the board, while short-covering found support of fresh funds placement in high dividend yielding stocks. The recently announced payouts certainly allowed the local bourse to stage a pull-back.
Leading from the front were the Fauji group stocks from fertiliser sector, while various mid-tier stocks invited accumulation on charm of short term capital gains. Main board stocks on back of short covering and speculative stocks followed the trend, thus allowing the index to pour-in triple digit gains and sustain above 12000, while turnover was contributed by LOTPTA.
The news of MTS approval, attributed as the main reason for bull-run was probably a regulatory formality and a procedural matter. Approval of the product, apposed by the previous chairman, made it mandatory for the KSE board to give a formal approval to complete the procedural cycle. The newly proposed product, still with the Law ministry can only be implemented after the product is received by SECP and then forwarded to the KSE board for implementation.
Regulations will be officially released for the market men to assess its productivity, thereby keeping the cautious stance alive. Since issues regarding economic and financial front are still persisting at alarming levels, in addition to threat of likely downgrading by international rating agencies due to fiscal imbalances.
The much hyped US citizen’s immunity issue and its daring consequences, strength in high priced, and highly leveraged stocks on speculative or technical activity should therefore be capitalized, said Hasnain Asghar Ali at Aziz Fidahusein.
KSE recovers, gains 131 points
