KARACHI: Shares rebounded on Tuesday after a slight drop a day earlier. The KSE-100 index climbed to new highs with gains of 316.62 points or 0.69 per cent to settle at 45,922.04.
Intra-day, the index jumped over the 46,000 huddle when it rose 408 points on the back of splendid performance by the second- and third-tier stocks. Shares that contributed significantly to the volumes included K-Electric (KEL), Hum Networks Lts, Unity Foods Ltd, Pakistan Int. Bulk Terminals Ltd and Silk Bank.
KE alone saw a change of hands in as many as 250 million shares or 30pc of the total shares transacted during the day, which was the highest single share volume since Feb 2006 when Bank of Punjab had seen trading in 268m shares.
“KEL did large volume in anticipation of deal closure after conclusion of the International Monetary Fund program, as highlighted by the State Bank of Pakistan governor on Monday” said an analyst. Overall traded volume at 826m shares, up 40pc over the earlier day, was the 86-trading session high.
The twin factors that saw the index take a flight were the bounce back in the banking sector and the absence of selling in the other heavyweight exploration & production sector.
International crude oil prices spiked during the session which lifted the prices of Oil and Gas Development Company (OGDC), Pakistan Oilfield and Pakistan Petroleum (PPL). The automobile sector saw most scrips in the green as investors were enthused over the 18pc year-on-year growth in car sales during the first half of the current fiscal year. Scrip-wise, major gains to the index were made by TRG Pakistan, Habib Bank Ltd, OGDC, KEL, and PPL.
Foreign investors continued their buying spree with inflow of $0.07m on Tuesday. The market continues to rise to new highs on improved economic figures, higher remittances, comfortable foreign exchange and the prospects of Pakistan resuming the IMF programme in January.
“Moving forward, the market is expected to rise further given the massive local liquidity and indication from the SBP of the resumption in the IMF programme”, says Hayat Khan Equity, trader at BMA Capital.
Yet other market strategists suggest caution as correction looks imminent after the huge rise of the index.
Published in Dawn, January 13th, 2021