Karachi stocks rebound in oversold market

Karachi stocks on Friday swooped back some of the recent massive losses as investors rushed to take positions in oil, fertilisers and cement ahead of the monetary policy announcement scheduled for today.
Money market players were expecting a cut of 50 to 100 basis points in discount rate.
Samar Iqbal at Topline Securities said investors built their portfolios on the eve of the central bank’s policy rate decision.
“Though the market gained 0.93 percent, yet volumes remained low as retail investors were cautious following a 10 percent fall in stocks value in the last few days,” Samar said.
The benchmark Karachi Stock Exchange (KSE) 100-share Index rose 208.21 points, or 0.93 percent, to close at 31,800.26 points.
The KSE 30-share Index was up 183.69 points, or 0.92 percent, to end at 20,227.46 points.
As many as 340 scrips were active; of which, 241 increased, 84 decreased and 15 remained unchanged.
The ready market turnover improved to 141.897 million as compared to 107.539 million during the last trading session.
Cement scrip cheered the rate cut possibility with Lucky Cement, DG Khan Cement, Fauji Cement and Maple Leaf Cement going up 1.7 percent, 3.0 percent, 4.9 percent and 5.0 percent, respectively.
However, this expectation dragged an index heavyweight MCB Bank down 5.0 percent, eating away 111 points. Barring one, all other financial institutions lost values in decimal.
Only Habib Bank Limited inched up Rs1.88 to close at Rs190.16/share.
Tahir Saeed at Topline Securities said the bourse has lost all gains so far made in 2015. MSCI Pakistan is down 3.0 percent due to foreign selling and political noise.
“Uncertainty about profit outlook of oil and banking sectors, having combined weight of 42 percent in KSE-100 Index, is affecting the market,” Saeed said.
“As the economic situation is improving the market will likely to recover all the losses in the next few months.”
Ahsan Mehanti at Arif Habib Commodities said leveraged stocks led the rally amid hopes of ease in monetary policy after the reduction in cut-off yields of government papers.
“Retreat in prices of West Texas Intermediate crude and cotton from six-year lows supported the index,” said Mehanti.
Highest volumes were witnessed in Fauji Cement with a turnover of 11.231 million shares.
The scrip rose Rs1.41 to close at Rs30.77/share. Pak Elektron was the second with 10.231 million shares, up Rs2.41 to end at Rs50.68/share.
Bank of Punjab was the third with a turnover of 9.245 million shares. It inched up 60 paisas to finish at Rs9.96/share.