Karachi bourse regains 154 points

KARACHI: Active short-covering on dips across the board on Friday helped the Karachi stock market recover from its recent losses. Turnover, however, further dropped below 200 million shares on the second day of Client Level Margining System. The recomposed KSE 100-share index posted a recovery of 1.66 per cent or 153.97 points and closed at 9,455.15 points. The parallel-running, 30-share index, gained 2.25 per cent or 223.87 points and ended at 10,170.68 points. Over four per cent (4.44 per cent) correction at the bourse in a one step forward and two step backward movement during the last one week provided an opportunity to buy on Friday, as lucrative stocks attracted local financial institutions on dips, said a leading analyst. On the other hand, foreign portfolio investors and local retail investors turned net sellers into the session. Almost all favourite sectors attracted institutional buyers, which included securities firms, energy, bank, telecom, cement, fertiliser, insurance, textile, refinery and others. Analysts said the beginning of announcement of results for the September quarter prompted prospective buyers to grab shares at lucrative levels, as improvement in world economies including that of Pakistan ignited hopes of positive corporate earnings. Turnover, however, further reduced to 199.77 million shares against 222.37 million on Thursday, showing a decline of over 10 per cent. Turnover in the future market also fell to 1.26 million shares as compared to 1.31 million shares changed hands yesterday. The price-recovery attracted a fund of Rs42 billion in the overall market capitalisation, which surged to Rs2,744 billion.

Analyst Ahsan Mehanti said intense buying was seen ahead of September quarter results season. While expectation of capital gain in banks and brokerage concerns; renewed foreign interest in telecom, banks and oil sectors; higher oil prices in world market; and rise in foreign exchange reserves altogether played a catalyst role in positive activity at KSE, he added. Analyst Hasnain Asghar Ali said short-covering led a momentum allowed the market to register triple digit gain, mainly on technical bounce back. Positive numbers allowed the prospective buyers to improve buying limits in the main board stocks. The investment companies along with low priced stocks allowed the turnover to attain decent levels otherwise it could have lower than the recorded one. Support committed on dips in the main board stocks, mainly by the local corporate participants, confined the down side. Short covering and cautious accumulation on dips allowed the index to find technical support. While high volume activity in the investment companies kept the interest of the local participants alive besides pulling the sentiment from bearish bullish. The brokers looked busy in restructuring their positions in accordance with the newly-introduced mechanism of Client Level Margining System, Ali added. Out of total 398 actives, 227 stocks advanced, 154 stocks declined, while the value of remaining 17 stocks remained unchanged. Highest volumes were observed in JS Company at 32.52 million closing at Rs40.42 with a gain of Rs1.46, followed by AH Securities at 15.93 million closing at Rs43.34 with a gain of Rs1.42, Pakistan Telecommunication Company at 10.58 million closing at Rs20.53 with a gain of 43 paisa, Nishat Mills at 7.70 million closing at Rs66.34 with a gain of Rs3.15, and Pak Oilfields at 7.10 million closing at Rs218 with a gain of Rs4.05.