KARACHI: Stocks shed on Tuesday some of the gains made on the first trading day after the announcement of the Federal Budget 2021-22. The KSE-100 index moved down by 93.52 points, or 0.19 per cent, and closed at 48,633 in patchy trading.
The market took off to a positive start but soon lost steam. The index moved between intraday high and low of 115 and 215 points. Mutual funds seemed to follow the wise counsel of Warren Buffett who once said that it was wise for investors to be “fearful when others are greedy, and greedy when others are fearful”. So while all participants including foreign investors; companies; banks; individuals and brokers, unsure about the index sustaining at close to 49,000 level, opted to book profit, mutual funds mopped up stocks across the sectors at dips.
A fund manager said that he believed that funds that were sitting on cash ploughed back the money in equities to maintain the statutory requirement of placing 90pc of their liquidity in stock funds.
Traders said that investors booked profit in refinery, banks, power, steel, chemicals and exploration & production sectors. Among refineries, NRL and ATRL recorded steep fall after reports that the country’s oil refineries had termed four clauses of the federal budget 2021-22 as counterproductive, including imposition of 2.5pc customs duty on crude oil.
On the E&P sector, OGDC rose for the second day as the government has set dividend target from OGDC at Rs56.5bn, representing per share dividend at Rs19.50, which investors thought promised higher profit from the company.
Stocks that made major contribution to lift the index included Hubco (52 points), KEL (29 points), TRG (28 points), FFC (18 points) and PSO (11 points). Scrips that were instrumental in pulling the market down included PPL (32 points), Lucky Cement (21 points), Systems Ltd (18 points), Engro Corp (17 points) and EFERT (15 points).
The trading volume increased from 1,217.8m shares to 1,224.6m shares. The traded value declined by 34pc to $180.7m as against $274.4m. Low-priced stocks KEL, Worldcall, Byco, Hascol Petroleum and POWER formed 55pc of the total turnover.
Published in Dawn, June 16th, 2021
