KARACHI: The stock market continued to drift lower on the first trading day of the week with KSE-100 index down 369.04 points (1.15 per cent) and close at 41-month low at 31,734.23.

While the foreign investors’ buying came to a halt, local institutions and individuals stood on the side-lines.

The index started off on a positive note as value hunters mustered courage to buy shares, now trading at dirt cheap valuations of 5.8 times the forward earnings.

However, the index could not maintain the upward momentum and succumbed to selling pressure, mainly on the political conditions that seemed to be heating up with the opposition’s demonstrations and the threat to move a no-confidence motion against the Senate chairman.

Finally, the increased participation in Pakistan Investment Bonds auction (accepted amount three years: Rs124.3 billion against Rs8.6bn in the previous auction with the cut-off yield at 14.25pc vs. 13.70pc in the last auction), reduced attractiveness of the equities in comparison to parking funds in government securities.

Meanwhile, the investors were further discouraged by some big ticket companies coming up with dismal results which sent the shares reeling down to intra-day low by 386 points.

Volumes declined again from 86.5 million shares to 45.5m shares (down 47pc day-on-day). Average traded value also receded by 22pc to reach $9.4m as against $12.1m on Friday.

Stocks that contributed significantly to the volumes included K-Electric, Maple Leaf Cement Factory (MLCF), TRG Pakistan, Pakistan Int. Bulk Terminal Ltd and Bank of Punjab, which formed 40pc of the total turnover.

Sector-wise selling pressure was witnessed in banks which fell 80 points and fertiliser 49 points. In the cements, MLCF was down 5.3pc, Pioneer Cement 5.2pc, Kohat Cement 3.8pc and D. G. Khan Cement 4.8pc were the major losers. Cement sector contributed 42 points to the day’s losses.

Among scrips, the top laggards in the index were Hub Power Company receding 40 points, United Bank Ltd 27 points Engro Corporation 27 points and Bank AlFalah Ltd 19 points. Most analysts call was sell on strength.

Published in Dawn, July 30th, 2019