KARACHI, Aug 7: Lacklustre activity was witnessed on Tuesday on the stock market with the KSE-100 index slightly down by 1.53 points on low volumes. The benchmark index closed at 14,672.24 points.
Market participants said that the investors moved with caution ahead of the important judicial pronouncement on Wednesday. Even the institutional investors put off the trading activity until the decision and its implications became clear.
There were reasons for the market to be active ahead of the announcement of SBP monetary policy statement on Aug 10 that most analysts believe could go for cut in policy rates as inflation was restricted to a single digit. Also the big ticket financial results in the fertiliser and particularly cement and banks were of interest to shareholders.
During the day, MCB Bank Board declared a healthy dividend for shareholders, but that failed to breathe life into the market. The only gleaming light was the continuous buying by foreign investors, who pumped another $1.34 million into portfolio investment on Tuesday, perhaps taking advantage, of low multiple equities, in the absence of local participants.
Equity dealer at Topline Securities commented that the market had remained range-bound as investors opted to take cautious stance amid Supreme Court case hearing on Wednesday.
Hasnain Asghar Ali, COO at Escorts Capital, commented that the index continued to consolidate gains led by front line E&P stocks mainly on expectations of healthy earnings and cash payouts.
Selective accumulation in other main board stocks on intra-day dips was noted. Technical recovery in Engro and hefty volumetric change of hands in a narrow allowed the short-term traders’ to look for intra-day opportunity to make quick gains.
Low volumes that seem like a temporary phenomenon, extended spell of sluggish activity might continue to keep the investors on the sidelines, disallowing the local equity market to perform at its potential.
Ahsan Mehanti at Arif Habib Corp stated that concerns for rising circular debt in energy sector, decline in cement dispatches, power shortfall for industrial sector and expected fall in fertiliser prices played a catalyst role in bearish sentiments despite recovery in global stocks and commodities on eurozone stimulus hopes and improved US job data.
The news flow was about cement sales in July down by 1.64 per cent compared with same month last year; the government likely to allow import of furnace oil for power sector on 120 days deferred payment balance which officials claimed could increase power tariff by 10 paisa per unit. Cotton and rice sowing remained 1 million acres below the target due to water shortage and load shedding.
The KSE-100 index shed 3.91 points to 12,625.46 points. Volume showed sharp fall of 22 per cent to 45 million shares from 58 million shares traded the previous day. Trading value stood down to Rs2 billion from Rs2.1 billion.
Market capitalisation shed Rs1 billion to Rs3.748 trillion, from Rs3.749 trillion. Among the 291 active stocks, 155 were losers, 105 gainers and 31 unchanged.
The greatest fall was noted in Shezan International, down by Rs13 to Rs256, followed by Fazal Textile lower by Rs9.86 to Rs187.51.
On the other side, Millat Tractors made the highest gain of Rs22.83 to Rs551.63 and Atlas Battery was up by Rs12.49 to Rs262.35.
At the top of ten volume leaders was Jah Sidd Co with just 3m shares, down 16 paisa to Rs14.45. Engro Corporation added 11 paisa to Rs89.82 on 3m shares, Quice Food gained 99 paisa to Rs12.23 on 2m shares and its right issue also touched upper circuit of Re1 to Rs2.24 on 1m shares.
NBP climbed by 52 paisa to Rs43.88 on 2m shares, Maple Leaf Cement added 19 paisa to Rs6.86 on 2m shares, Fauji Fertiliser slipped by 49 paisa to Rs113.34 on 2m shares, DG Khan Cement was up by 14 paisa to Rs46.32 on 2m shares, KESC edged higher by 10 paisa to Rs3.68 on 1m shares and PTCL was down by 21 paisa to Rs13.79 on 1m shares.