KARACHI – Market rallied to the north following a dismal performance in the last week as foreign investor’s gained interest in the local bourse. Recovery, contributed by both local and foreign interest, jacked up the index by 2.8 percent. The government, left with no option, decided to raise petroleum product price after a surge in international crude oil prices.
The KSE-100 index closed at 11608.43 points marked by a gain of 319.20 points, while total volume and total value stood at 122,142,444 and 6,690,680,419 respectively. The KSE-30 index accumulated 370 points to close at 11310.68 levels, while the all Share index closed at 8083.87 levels. Out of 655 scrips, 220 advanced, 68 declined and 367 remain unchanged. Volumes revived as 153 million shares were traded, up 77 percent from yesterday.
Increase in local petroleum prices triggered the early positive impetus for the market with POL, PPL and PSO all rising by 4.8 percent, 5.0 percent and 2.4 percent respectively. NBP, the largest government owned bank, closed on its upper limit after it announced a better than expected FY10 result. Moreover, UBL too closed on its upper limit after announcement of an employee benefit scheme that allows them to invest in UBL shares worth Rs 230 million.
Although the move of increasing petroleum products is likely to fan inflationary pressures, ease on fiscal pressures. NBP’s earnings at Rs 13.05 per share, with a cash payout of Rs 7.5 per share and 25 percent stock dividend that outdid consensus expectation provided further impetus to the rally.
Woes on economic, financial, geo-political and diplomatic fronts, issues have restricted high priced stocks from gaining ground; however volumetric activity in low priced stocks besides extending support to the gains did invite day-traders for short term punt. The gloomy horizon and likely social, political and economic repercussions of the recent rise in petroleum products disallowed traders to trade at maximum capacity.
Launching of ready board leverage and participation by corporate players in the new product will continue to provide support to the fundamentally strong stocks managing consistent growth and dividend flows despite polluted environment, said Hasnain Asghar Ali at Azizfidahusein. He added that stringent regulatory amendments for clients, likely to participate in the new version of CFS, might reduce effectiveness of the product.
Regulations are likely to hit the flexibility of the mode of financing and lack of participation by financiers might keep chances of stagnation led sell-off on the higher side. Strength from high turnover will continue to provide short term trading opportunities.
