KSE crosses 5,500 points on investment-friendly news: The News

Thursday, February 05, 2009
By our correspondent

KARACHI: Investment-friendly news helped the Karachi bourse benchmark KSE 100-share Index breach through 5,500 points mark on Wednesday.

The KSE 100-share Index gained 149.38 points or 2.77 per cent to end at 5,534.25 points. The parallel running junior 30-Index rose by another 210.76 points or 3.99 per cent and closed at 5,494.04 points.

The bazaar opened in green zone and stayed there throughout the session. The step-by-step rising up stocks market hit intra day high of 5,542.26 points. A little profit-booking in the closing moments, however, adjusted market to the closing level.

Day traders and margin hunters were active in almost all the favourite sectors including energy, banking, insurance, fertilizer, cement and telecom on upper levels. About two-dozen stocks hit their upper circuit breaker of five per cent of Re1, which ever is higher. The upper locks were mainly seen in the banking, insurance and energy stocks.

Analysts said that the continuous relaxation to the financial sector from its regulator i.e. State Bank of Pakistan (SBP) kept inviting banking an insurance loving investors to the main arena.

“Following a 30 per cent benefit of Force Sale Value (FSC) on Non-performing Loans (NPLs) to banks last week, the SBP and Securities & Exchange Commission of Pakistan (SECP) have reportedly agreed to give another benefit to financial institution and that is to gradually write-off deficit on revaluation of listed equity investment, TFCs and Sukuk for over two years period,” said Ahsan Mehanti at Shahad Chamdia Securities.

According to another analyst the lowering of rate of return on 10-years Pakistan Investment Bond (PIBs), from 16.5 per cent to 14.75 per cent, shows that the financial system holds sufficient liquidity. Moreover, the reduction in PIBs rate would encourage liquated investors to invest in equity market, he added.

Hasnain Asghar Ali at Aziz Fidahusein says that the forthcoming petroleum policy, which is likely to carry more aggressive targets and incentives for prevailing and new investors, provoked energy investors to take his part in the on-going bullish rally.

But these days buying euphoria might prove of short-term nature, as these days investors are mostly speculators, who are mainly focusing on short-term capital gains and dividend yields, he foresaw.

For more on this article, please click on the following link: KSE crosses 5,500 points on investment-friendly news: The News