Pakistani stocks ended on a seven-and-a-half month high on Friday, and in healthy turnover, led by Engro Corp after it announced a higher than expected full year result, dealers said.
Engro Corp announced on Thursday a 19 percent increase in its net profit for 2011 at 8.1 billion rupees ($89.31 million), compared with a net profit of 6.8 billion rupees in 2010.
It also announced a final cash dividend of 2 rupees per share which brought the cumulative dividend for year ending Dec. 31 at 6 rupees per shares and a 30 percent bonus.
The Karachi Stock Exchange (KSE) benchmark 100-share index rose 0.74 percent, or 91.44 points, to end at 12,495.68 points, its highest close since July 6, 2011.
Turnover climbed to 233.2 million shares, compared with 205.56 million shares traded on Thursday.
“The rally today was led by Engro Corp’s excellent payout, which triggered buying in all the leading shares,” said Samar Iqbal, a dealer at Topline Securities Ltd.
Engro Corp ended 5 percent higher at 134.24 rupees.
In the currency market, the rupee ended weaker at 90.77/83 to the dollar, compared with Thursday’s close of 90.68/73 because of higher import payments especially of oil as global oil prices were trading near $120 a barrel.
The rupee touched a record low of 91.28 to the dollar on Jan. 9, pressured by worries about higher payments for oil imports and the country’s overall economic health.
The rupee is likely to stay under pressure, and the State Bank of Pakistan has cautioned that the real challenge was to finance the projected current account deficit. The latest monetary policy announcement kept the key policy rate flat at 12 percent for the next two months.
The current account recorded a provisional deficit of $2.633 billion in the first seven months of the 2011/12 fiscal year, compared with a deficit of $96 million in the same period last year, according to data from the State Bank of Pakistan.
The deficit is likely to widen further in coming months because of debt repayments and a lack of external aid.
Dealers said they were also cautious after the International Monetary Fund (IMF) advised Pakistan to take immediate steps to tackle growing budget pressures and raise interest rates to contain inflation.
The IMF last week projected a widening of Pakistan’s budget deficit in the 2011/12 fiscal year to 7 percent of gross domestic product, compared with the government’s revised budget target of 4.7 percent.
In the money market, overnight rates ended flat at the top level of 11.90 percent, unchanged from Wednesday’s close amid lack of liquidity in the interbank market.
