STOCK MARKET UPDATE: 11.10.2011

Stock

Karachi Stocks Up 212.33 Points:
KARACHI, Oct 10: At close of trading, the KSE-100 index was at 12066.17, up 212.33 points.

October 10, 2011

TOP  5  SCRIPTS GAINERS AND LOOSERS:

UniLever Pak Ltd	Rs 31.44	Nestle Pakistan	Rs (6.25)
Attock Petroleum	Rs 18.89	Sitara Chemical	Rs (3.61)
Millat Tractors	Rs10.50	Nadeem Textile	Rs (3.08)
Pakistan Oilfields	Rs  9.14	Salfi Textile XD	Rs (2.66)
National Refinery	Rs 8.93	Al-Abbas Sugar	Rs (2.00)

KSE 30 – Shares Index	Previous Rs11,366.73, Monday’s Rs11,634.34,plus 267.61 points.
KSE 100 – Shares Index	Previous Rs11,853.84, Monday’s Rs12,092.32, plus 238.48 points
MARKET CAPITALIZATION	Previous Rs3,126.002bn, Monday’s Rs3,183.424bn,plus 57.472bn
VOLUME LEADERS	PTCL 40.059m, Hub-Power 12.961m, Fatima Fertiliser 12.145m, D.G. Khan Cement 11.133m, Lotte Pakistan 7.689m shares.
TOTAL VOLUME	183.078m shares
TOTAL	TONE: bullish, total listed 638, actives 377, inactives 261, plus 195, minus 89, unchanged 93

Foreigners turn net sellers of equity

KARACHI, Oct 10: The Karachi Stock Exchange saw 238 points or 2 per cent jump in KSE-100 share index on Monday. That the index scaled over the 12,000 level after two months, was not half as surprising as 150 bps cut in discount rate by the SBP on Saturday –the sharpest cut in nine years since 2002.

The ever grumbling stock brokers over thin volumes were over-worked on Monday with the business in shares, touching 184 million shares–the peak volume in nine months.
The SBP decision to go for an aggressive discount rate cut by 150 bps that pulled it down to the pre-2008 crisis level of 12 per cent was 50 to 100 bps sharper than stock analysts` expectations.
It was nonetheless hoped to have a favourable impact on corporate profitability with a decline in financial charges going forward.
Key beneficiaries were expected to be cement, textile and some largely leveraged fertiliser companies.
The monetary easing ignited strong reaction in the secondary markets.
“Besides the equities, also consider other instruments and indicators,” said one market watcher.
He pointed out that benchmark six-month lending rate Kibor had eased to a 26 month low of 11.96 per cent (down 95bps in a day); the actively traded one-year T-bill and benchmark 10-years PIBs yields were down by 75bps and 60bps to trade around 11.93 per cent and 12.05 per cent, respectively.
Some suspected that the aggressive policy easing may have been motivated by political considerations to ease sufferings of masses burdened by economic slowdown, power outages and lower welfare spending.
Three more reviews are left for the current fiscal, but many analysts believe that the rates may be kept frozen at the current level since they now equal government`s expectations of inflation this year.
Most market participants expect rolling times at the stock market and it would be cruel to spoil their fun. But as shares rallied with local individual and institutional investors scrambling to pick up high dividend yielding and leveraged company stocks, foreign investors were noted to be net sellers of equity worth $2.18 million on Monday.
Small measure of sales by foreigners has been coming up for the last few weeks and the net selling on Monday was nothing of a surprise.
Some market participants thought that the overseas investors may have grabbed the opportunity to dispose of equity at higher values. Zubair Ghulam Hussain, head of sales at Foundation Securities, one of the major firms that attend to foreign orders, said reassuringly: “A day`s sale is no indication of the foreigners` flight.”
Heavy outflows over a period of time could be considered slightly worrisome. Yet such an event was not near at sight.

Rate cut propels stocks to new highs

KARACHI: The share market on Monday welcomed more than expected cut in the policy discount rate as perceptions of cheaper credit lines could give a tremendous boost to the investor purchasing power.

“The ball is now in the court of private sector as a whole, leading analysts said, and added, “How they will respond to the move taken by the State Bank and endeavour to boost economy will be keenly watched during the next couple of weeks.”
Bulk of the renewed buying remained confined to high dividend yielding stocks, while the broader market showed fractional price changes.
The market`s buoyant mood was also well-reflected in the early steep rise in the benchmark to session`s high of 12,202.78 points but mid-session selling pushed it down to close at 12,092.32, up by two per cent or 238.48 points.
Traded volume soared to 7-month high of 183.078m shares as some of the low-priced shares, having potential of higher capital gains, were the main attraction of the investors. Oil, Cement and fertilizer shares led the market`s advance.
Faisal Abbas, a prominent stock analyst, said the initial positive investor reaction was more than welcomed and hoped it could be sustained in the coming sessions also as the central bank`s move is timely and will solve the liquidity problems of the prospective investors at cheaper rates.
He said the rise of benchmark well above the new target of 12,000 points reflects that the current buying spree will get the momentum in due course.
“The downward revision of the discount rate was broadly welcomed by the investors in general but will it spur the private sector investment is a question being debated by the investors,” said a leading analyst Ahsan Mehanti.
He said no one could doubt the central bank`s perceptions about the state of the economy and it needs boost by cheaper credit lines and viewed in broader perspective the cut is more than widely speculated figure.
Another leading analyst Samar Iqbal says how the investors would react to the central bank`s move to put the private sector back on the rails would be known during the next couple of sessions by the performance of the broader market.
However, one thing appears to be a bit disturbing that selling by some of the financial institutions on some blue chip counters gave a wrong signal to the general investor.
Leading gainers were led by Unilever Pakistan and Attock Petroleum, up by Rs31.44 and 18.89, while notable losers, included Nestle Pakistan and Sitara Chemicals, off Rs6.25 and 3.61.
The active list was led by PTCL, up 76 paisa at Rs12.46 on 40m shares followed by Hub-Power, steady 89 paisa at Rs42.57 on 13m shares, Fatima Fertiliser, firm by 73 paisa at 20.36 on 12m shares, D.G. Khan Cement, higher by 63 paisa at 23.21 on 11m shares, Lotte Pakistan, steady by 18 paisa at 12.08 on 8m shares, Fauji Fertiliser Bin Qasim, higher by Rs1.40 at Rs61.76 on 6m shares, and National Bank, up by Rs1.66 also on 6m shares.
J.S. & Co followed, easy by one paisa at 5.67 on 5m shares, Arif Habib Securities, higher by Rs1.50 at 32.19 on 5m shares, and Nishat Power, higher by 99 paisa at 15.35 also on 5m shares. FUTURE CONTRACTS:
Active trading was also seen on this counter on heavy turnover where PTCL came in for active support and led the list, up 73 paisa at Rs12.54 on a large volume of 1.674m shares, followed by National Bank, higher by Rs1.76 at 50.55 on 1.139m shares and Fauji Fertiliser Bin Qasim, up Rs1.16 at 62.05 on 1.085m shares.
D.G. Khan Cement followed them, steady by 68 paisa at 23.44 on 1.048m shares and Arif Habib Corporation, higher by Rs1.11 at 27.72 on 0.971m shares. DEFAULTER COS:
The activity on this counter was relatively slow as investors remained busy in the ready counter amid hopes of capital gains after the cut in the discount rates.
Stray business was witnessed in Japan Power, lower five paisa at Rs0.90 on 6,759 shares followed by Quice Foods, higher by 60 paisa at 5.30 on 6,000 shares and Crescent Jute, unchanged at 0.50 on 5,501 shares.

 

Mohammed Saleem Mansoori