Bulls catapult index to 54-month high

0
115

The Karachi stock market closed Wednesday at what the Exchange said was its “highest” level with benchmark 100-share index peaking to a historic 15,712.21 points.
According to official data, this jump by the index happens to be the 54-month high as on April 18, 2008 the benchmark had climbed to its highest level, 15,676.34. Wednesday’s upward movement by the index marks an increase of 35.87 points compared to that of April 2008.
The KSE said the maximum increase in KSE-100 index was 960.50 points on June 24, 2008 against a maximum decrease of 696.25 points the market had witnessed on December 31, 2007. On July 14, 1998 the index had nosedived to its lowest level of 765.74 points with market capitalization for the day standing at Rs 234.145 billion only. The highest trading turnover at KSE was recorded at 1.122 million on April 16, 2004 with the index standing at 5,582.28 points.
“KSE 100 index breaks the previous record,” said the regulators at Karachi Stocks Exchange (KSE) in a statement.
The investors’ hope for a further rate-cut, of at least 50 basis points, by the central bank on coming Friday, Oct 5, is said to be the major stimulus for the index hitting the historic high. “Highest ever closing by KSE index today amid hope that the interest rate will further decline,” viewed Mohammad Sohail, a senior stock analyst and chief executive officer of Topline Securities.
Ashen Mehanti, another senior equity market observer and director at Arif Habib Securities, believes that the decrease of previously double-digit Consumer Price Index inflation to 8.79 percent during September had raised the speculations for a 50 to 100 basis point cut by the State Bank in its next monetary policy decision due tomorrow on Friday.
“Pakistan stocks closed bullish… after Sep ‘12 CPI Inflation stood at 8.79pc YoY raising speculations ahead of SBP policy rate announcement due on Oct 5,” the analyst said on Tuesday.
Farhan Mahmood of InvestCap Research said the local market had already priced in the impact of 50 to 100 basis points decrease in the discount rate as the banking stocks plunged by 8 percent in last two months while the KSE 100 index was up 6 percent.
Another InvestCap analyst Abdul Azeem viewed that the benchmark touched the highest level of its current rally on Wednesday.
The day saw the KSE 100 index gaining 64 points or 0.41 percent compared to Tuesday’s 15,648.29 points. The index hit the intraday high of 15,747.64 points and then slid to the intraday low of 15,607.10 points.
The trading turnover at the ready counter was recorded, however, lower at 107.651 million shares as against 140.793 million of the previous session. The trading value for the day accumulated to Rs 4.2 billion against Tuesday’s Rs 5.9 billion. While the market capital stood almost flat at Rs 3.964 trillion compared to Rs 3.947 trillion of the previous day. “Turnover was not as healthy as it should have been at this level,” viewed Abdul Azeem of InvestCap Research adding that the index needed healthy volumes to take it further up towards 15,850 points level.
The analyst foresees the index moving towards new highs. “The index still has the potential to go further up towards 15,850 points. Closing above 15,570 points is expected to be a confirmable zone,” he said. The day’s volume leader was Jahangir Siddiqui Company which saw its 13.354 million shares traded each at Rs 13.43 in opening and Rs 13.99 in the closing. The trading volumes on the future market dip to 7.877 million shares against 12.543 million of Tuesday.