KSE rebounds, gains 106 points on T-Bill yields reduction

KARACHI - After two successive days decline, the Karachi stock market on Thursday witnessed bullish activity as the benchmark KSE 100-index gained 106 points to close at 9,251 points.
The KSE 100-index opened in green zone with a gain of 47.95 points and at the end of the day closed at 9251.19 with a gain of 106.43 points. The junior partner KSE 30-index closed at 9774.87 with a gain of 130.34 points. KMI 30-index closed at 13505.38 with a gain of 195.94 points. All shares index closed at 6555.83 with a gain of 70.76 points.
Trading activity was minimal as compared to the last trading session as the ready market volume stands at 108.204 million shares as compared to last trading session 161.934 million shares. Future market volume however stands at 3.060 million shares as compared to 4.633 million shares last trading session. Market capitalisation stands over Rs2.671tr. Total trades decreases to 86,646 as compared to last trading session 98,837.
As many as 212 companies advanced, 141 declined and 20 remained unchanged.
Highest volumes were witnessed in NML at 9.511 million closed at Rs67.04 with a gain of Re0.58 followed by PTC at 7.489 million closed at Rs18.02 with a gain of Re0.19, AHSL at 6.875 million closed at Rs47.80 with a gain of Re0.77.
Ahsan Mehanti at Shehzad Chamdia Securities said buying activity witnessed on continuing foreign interest in oil and gas Sector.
Investors remained bullish as T-Bill yields reduced by 31bps in 12-month tenor increasing expectation for discount rate cut. Rise in international oil prices near to $80.00, expectation of early approval of Leverage products by SECP played a catalyst role in positive activity despite Peshawar blast.
Hasnain Asghar Ali at Aziz Fidahusein said low volume high impact cost due to absence of user-friendly leverage product continue to stay major cause of concern for the local participants and stakeholders.
Low volume gains by the index heavy weight OGDC yet again disallowed the underlying tone to reflect in the benchmark, most of accumulation was done on assumption of and by offshore participants, stagnation and low volumes restricted day trades.
Accumulation was prominent in low priced and high dividend yielding stocks by both retail and corporate participants, while snap rallies in high price stocks stayed a regular feature, mainly to keep excitement alive.
Emergence of textile stocks in the volume leaders have been offering trading opportunities to the market, thus allowing opportunities for short and medium term activities. Despite various attempts made to invite excitement, in order to improve prevailing sentiment, such as by highlighting developments (dispatch of committed loans), those cannot have optimum return mainly due to managerial in competency, by making farfetched assumptions of the magic number in upcoming monetary policy in combination with various other immaterial developments.
Market participants are likely to wait for material efforts for confidence placements; therefore, being carried away by the stunts may not be a safe bet. Consistent dollar inflow from previous sessions kept the index in positive territory, activity by off-shore participants however failed to invite local support for medium and long term mainly due to reservations regarding payouts and revenues from the government companies.
Although blame is on circular debt for decline in payout ratios and revenues, the local participants took a cautious stance. On the contrary strength in the expensive stocks continued to invite fresh float. Nevertheless, gains in index heavy weights kept the benchmark positive despite off-loading in other stocks; midday stagnation however led to mild reduction in gains, that was recovered by day end through low volume price inflation.
Leading textile stocks continued to invite local activity mainly due to steps taken by EU on Chinese imports and growing prices of yarn in local and international markets, thus providing more options to the short and medium term investors.
Economic issues mainly likely short fall in tax revenues and export target (according to exporters), high government borrowings and issues pertaining to financial and asset mismanagement however continued to keep confidence level on lower side, with local strength already clipped a wait and see strategy is being followed. Opportunities of short-term trades may however be capitalised besides capitalising on the stocks having the strength of sustaining consistent dividends, yielding in double figures, while strength in expensive stocks can be looked for off-loading.