The Karachi stocks market climbed to a record high Friday on the back of what the analysts said strong valuations of certain blue-chip stocks.
The last trading day of the week saw the KSE 100-share index gaining 58 points or 0.18 per cent to close at a historic 32,148.78 points.
Compared to last week’s 31,197.98 points, the index by climbing to Friday’s high showed a week-on-week growth of 3.05 per cent. Thursday’s closing was 32,090.93 points. The trading volume recorded at the ready-counter as well as the value of stakes traded remained lower at 286.4 million shares and Rs 13.1 billion, respectively.
The number of shares traded on the previous day stood at 378.3 million valuing over Rs 18.8 billion. “Profit taking was witnessed after index touched all time intra-day high,” viewed Topline analyst Samar Iqbal.
The index also hit the intra-day high of 32,315.56 points. With falling international oil prices, some selling was witnessed in the index heavyweights like OGDC and PSO, the analyst added.
“KSE-100 index rose by 58 points to close at 32,149 points level for the first time ever,” Samar said. Mid cap stocks, the market observer said, remained in the limelight, including TRG, Bank of Punjab and Adamjee Insurance Company. The day saw trading in 396 scrips of which 195 gained value, 173 lost and 28 stayed unchanged.
The market capital remained flat at Rs 7.3 trillion. Ahsen Mehanti, a senior equity analyst, said the historic rally was led by selected scrips across the board on strong valuations.
“Upbeat cement sales data for Nov’14 at 10.9pc YoY, rising trend in DAP sales, retail interest in second and third tier stocks and strong economic outlook as the government signed low cost green energy deals with Kyrgyzstan and Tajikistan played a catalyst role in bullish activity at KSE,” said Mehanti, a director at Arif Habib Corporation.
TRG Pakistan topped the list of 10 top performers of the day by counting its traded stakes at 24.5 million. Others doing well included Bank of Punjab with 18.1 million shares, Silkbank 14.5 million, Adamjee Insurance 12.7 million, SNGPL 10.8 million, Jahangir Siddiqui 10.3 million, NIB Bank 8.7 million, Byco Petroleum 8.5 million, Pakistan Elektron 8.4 million and Sui Southern Gas Company 8.3 million shares.
The trading volume on the future market also remained downward and declined to 26.4 million shares from Thursday’s 35.3 million. While the benchmark 100 index made history on Friday the free-float KSE 30-share index set in the red zone by shedding 68 points.
The index closed at 20,818.33 points as against 20,886.49 points a day earlier. The country’s bourses, the economic observers believe, are set to hit its utmost potential on the back of stable macro-economic indicators.
The 50 basis points slashing of discount rate by the central bank is believed to be a major attributable factor behind the expected rally.
“We anticipate a further cut in policy rate, which will prove to be a positive development for leveraged companies and business community in general,” said InvestCap analyst Abdul Azeem.
Having opened on a positive streak this week with 31,209.46 points, the market saw among the investors a bullish trend throughout the week. “Market participants were reluctant to take new positions during the last week mainly due to a protest staged by the PTI on Sunday in Islamabad,” said Azeem.
However, he said, investors were relieved as the protest concluded peacefully making them optimistic even though the PTI had called for shutdown of some selected cities.
Sturdy positives like KSE’s status as a second best performing market in Asia alleviated the investors sentiments, the analyst said.
The investor confidence was portrayed in the average daily traded volumes this week that stood at 349.88 million shares, showing a WoW rise of 67.5 per cent. Giving a positive outlook, Azeem said the low CPI inflation figure had paved the way for a further discount rate cut.
“The expected cut in discount rate would help to boost the bottom-line of the leveraged companies and would hoist the recuperating economy,” said the analyst.
The low oil prices globally have a positive effect for economy of Pakistan, as oil bill being a gargantuan portion of import bill, would be a relief for the Balance of Payment. Moreover, those companies who consume oil as an input are also cashing on it. “We anticipate an encouraging journey for the index next week,” he said.