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Stocks fall on weekend profit-selling

December 08, 2012

KARACHI, Dec 7: The KSE-100 index was lightly down by 16.64 points to 16,807.91 points on Friday, as investors opted to take profit ahead of the two day week-end closure of the market.

As the index crossed over 16,900 levels for a brief moment, cheers were mixed with nervousness at such dizzy height.

Investors squared their positions so as to balance their portfolio. The turnover in terms of shares was up to 313m, from 258m shares traded on Thursday.

Yet the trading value declined to Rs6.3 billion, from Rs6.9 billion, evidencing larger trading in low-valued stocks.

Stocks could have had a free fall on Friday, particularly in the second session, but for heavy portfolio inflow of $3.05 million from foreign investors. Among local participants banks were bullish on the stocks with net buy of $2.69 million.

Mutual Funds, however, offloaded stocks worth $3.58 million at the currently ruling higher prices and corporates followed suit with net sell of $2 million worth equity. Market capitalisation was higher at Rs4.218 trillion on Friday, from Rs4.204 trillion the previous day.

The market yet again saw indiscriminate buying by either the greedy small investors or big speculators of ‘lame ducks’ in most sectors, particularly textiles, where traders said that stocks of many companies that were either non-existent or saddled with insurmountable debts and deficit, hit the ‘upper lock’ — gaining maximum, normally Re1 —permissible in a day’s trading.

Many wondered if the regulators should intervene to alert investors about such ‘shell’ companies, or let the rule of ‘caveat emptor’ (buyer beware) prevail.

Ahsan Mehanti at Arif Habib Corp said that the stocks closed bearish amid higher trades on institutional profit-taking in overbought stocks. Trade remained mainly in second and third tier stocks.

Fall in global stocks and commodities on US financial crises and Europe debt concerns, falling country’s foreign exchange reserves and limited foreign interest played a catalyst role in bearish sentiments at KSE Equity Dealer, Samar Iqbal at Topline Securities said that after continuous rise in the last few sessions, market saw some profit taking.

Hasnain Asghar Ali at Escorts Capital said that the index under went technical adjustment, while speculations linked to monetary stance in the expected policy review kept various participants guessing.

The value stocks did invite renewed accumulation on intraday lows, thus restricting the technical correction from converting into a bearish spell. Profit-taking that triggered in various frontline stocks, after yet another intra-day high, kept the benchmark in red zone.

Banking stocks stayed in green as expectation of high payouts during yearly announcement was fortified with the possibility of lenient view on minimum deposit rate that may add extra value to the banking stocks.

The loss making stocks at 191, outnumbered gainers at 159 with another 26 unchanged in a total of 376 shares traded on Friday.

On the list of top-ten volume leaders, Lotte PakPTA topped with turnover seen in 59m shares, up by 86 paisa to Rs8.19. It was followed by Azgard Nine with 25m shares higher by 19 paisa to Rs8.89. PIA added another 43 paisa to its gains on Thursday with the stock price closing at Rs4.01 on 22m shares.

Jah Sidd Co was down by 90 paisa to Rs17.65 on 13m shares; Fauji Cement with volume of 13m shares shed 7 paisa to Rs6.73; Maple Leaf Cement dived down to ‘lower lock’ of Re1 to Rs13.43 on 12m shares.

Byco Petroleum saw turnover in 11m shares, down 39 paisa to Rs11.27; NIB Bank added 10 paisa to Rs2.48 on 10m shares; D.G.

Khan Cement lost 62 paisa to Rs54 on 9m shares and NBP gained 31 paisa to Rs50.57 on 6m shares.