Pak-China business summit takes KSE 72 points higher

The Karachi stock market remained under the bullish spell during the week as the Pak-China Business Cooperation Summit, which concluded with 17 agreements – four memorandum of understandings (MoUs) and one joint venture worth $15 billion between the 2 countries, propelled investors to go for buying activity.

The Karachi Stock Exchange (KSE) 100-share index gained 72.08 points or 0.60 percent closing at 11,858.17 points compared to 11,786.09 points of the previous week.

“The market opened on a positive note following Chinese PM’s visit,” said JS Sec analyst Rabia Tariq. “However, later on in the week, typical profit-taking trend before the year-end was witnessed.”

Rising cotton prices boosted textiles like NML and NCL while reports of a likely payment of Rs 35 billion by the Ministry of Finance to Pakistan State Oil (PSO) to ease its financial woes caused the stock to rally 2.8 percent, she said.

“Market sentiments were boosted following the Pak-China Business Cooperation Summit which concluded with 17 agreements, four MoUs and one joint venture worth $15 billion between the 2 countries. On the contrary, the government of Pakistan’s request for a 9-month extension in the International Monetary Fund’s Stand-by Arrangement proved to be a dampener. Moreover, in this week’s PIB auction, the State Bank accepted bids worth Rs 20.5 billion, with 3, 5 & 10-yr yields rising to 14.25 percent, 14.30 percent and 14.36 percent, up 35bps, 30bps and 26bps, respectively.

With rising cotton prices in the international and local markets, textile sector witnessed an increase of 3 percent in its capitalisation with NML and NCL (up 3.4 percent and 2 percent) mainly in the limelight. News of Engro’s new fertilizer plant likely to attain CoD in the 2nd week of January 2011 and increase in urea prices by Rs 190 per bag, caused the scrip to gain 2 percent. PSO rallied on MoF’s assurance of a Rs 35 billion payment to ease its financial burden from the circular debt issue.

Foreigners continued their buying spree, with net investment of $5.5 million, while banks were the major sellers worth $16.4 million.

The total turnover fell by 27.56 percent to close at 87.01 million shares as compared to 120.12 million shares of the previous week.

“Bullish activity was witnessed in scrips across-the-board on hopes for launch of leverage products as SECP appointed a new chairman,” said Arif Habib Investment Ltd Director Ahsan Mehanti said.

via Daily Times – Leading News Resource of Pakistan – Pak-China business summit takes KSE 72 points higher.

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