KARACHI: The significant feature of trading at the stock market on Thursday was the record all-time high traded volume at a staggering 2.20 billion shares. It signalled an upside of 42 per cent over the previous day’s all-time high volume of 1.56bn shares.
The stock market snapped a four-day strong rally, when the KSE-100 index slipped by 22 points, or 0.05pc, and settled at 46,791.
However, like the earlier day, 43pc of the volume or 950m shares were contributed by change of hands in just one penny stock -- WorldCall. The telecom stock regarded by many as the ‘’katchra’’ (junk) item remained in the green all through the day except for the last hour when it switched between green and red but settled 2 paisa higher still at the heavily discounted price of Rs3.50.
The repeat performance of the WorldCall stock in terms of contribution of volume did little to cheer up the knowledgeable investors who said that considering higher volumes also in other ‘third-tier’’ scrips such as Hum Network; Silk Bank; Byco and K-Electric which together with WorldCall accounted for 65pc of the aggregate record high volume, displayed more of seizing opportunity to make money through speculation than buying on fundamentals.
“The jubilation on the historic high volumes makes sense since it sounds good to the ears” said a veteran at the market mockingly.
“It suits them all—the government, for it proudly attributes the feat to its accomplishments on the economic turnaround; the regulators for they are able to give an allusion of massive investor participation and market growth; the company sponsors for it provides them a singular opportunity of selling off frozen blocks of shares at higher value and making millions in the bargain and the stock brokers for although at a tiny percentage of 0.05 paisa a share, they earn mouth-watering aggregates sum in commissions.
At PSX, the trading started on a positive note and the index hit intraday high by 392 points taking the accumulated gains to a staggering 1,629 points, or over 3pc, in five days. The index also tore through the 47,000-level and touched 47,204. But that proved to be too high in too short a time.
The index thus succumbed to selling pressure mainly in the last hour and after hitting the intra-day low of 137 points, it scrambled back to end with smaller loss. The index was thought to have stepped down also due to the futures rollover phenomenon.
Other than that investors chose to err on the side of cautious before the Monetary Policy Committee meeting to be held on Friday (May 28). Market consensus was on an status quo of policy rate at 7pc, though some concerns were aired on a possible higher inflation. Technology & Communication sector continued to grab the limelight. Traders said that better than expected GDP growth and expectations of incentive-laden budget could continue to strengthen investors’ confidence.
On Thursday, MSCI rebalancing triggered some excitement in the market. In the last trading hour market witnessed profit taking due to rebalancing where hefty volumes were witnessed in the shares that had seen changes: Lucky Cement, OGDC, TRG, PKGS, INDU and NBP.
Published in Dawn, May 28th, 2021