KSE declines 26 points on profit-selling

Friday, December 18, 2009
By our correspondent

KARACHI: The Karachi stocks market remained subject to profit selling on the third consecutive day on Thursday, but a little buying in few blue-chips reduced fall to modest.

The KSE 100-share Index posted another marginal decline of 26.48 points or 0.29 per cent and closed at 9,227.18 points. Its junior partner the 30-Index shed more 24.31 points or 0.25 per cent and finished at 9,797.54 points.

Analysts said that the Supreme Court verdict on National Reconciliation Ordinance (NRO), saying that this black law never existed, and confusion of its application on President Asif Ali Zardari, kept investors in two minds.

Under the prevailing circumstances, investors therefore opted to book profits at the day inflated levels, as speculators succeeded in placing market to the immediate resistance level above 9,300 points in wee hours.

Oil & Gas Development Company (OGDC) and MCB Bank were the only two heavy weights, which ended up in green territory. But tiny increase in their values with thin turnover prevented them from performing their traditional role of moving indices in the same direction in which they travelled.

Many of the tier-two stocks, particularly the banking ones, managed to close on positive note. Their closing with penny gains, however, kept their impact on key benchmark 100-Index underweighted.

“Banks attracted some fresh investments, as they are supposed to book one time capital gain in NIT-LOC Fund sometime in December-2009 or January-2010. They will do it because government was reportedly reluctant to extend their Letter of Comfort beyond December 31, 2009,” said an analyst.

The turnover was 206.85 million shares as compared to 146.77 million shares yesterday - showing an increase of above 40 per cent on day-to-day basis.

Turnover in future market also improved to 2.59 million against 2.34 million traded a day earlier. Market capitalisation dropped by another seven billion rupees to Rs2,660 billion.

Foreign portfolio investors and non-banking finance companies led divestment in this session. In aggregate, they withdrew $1.98 million and $1.20 million, respectively, according to NCCPL.

Local individuals and banks/DFIs were the two optimistic investors, who bought shares worth $1.83 million and $1.02 million, respectively. Local companies invested $945 thousand and mutual funds divested $329 thousand.

Analyst Ahsan Mehanti said that profit taking was witnessed in the market as investors feared changes in political set up after NRO declared void by Supreme Court in Pakistan.

Investors remained concerned over prevailing political uncertainty, fall in rupee value against dollar and high leverage cost altogether played a catalyst role in negative activity at KSE.

Analyst Furqan Punjani said recovery in oil prices triggered bullish sentiment in E&P stocks at the beginning but selling pressure was witnesses at the end following the news that NAB has requested interior ministry to place names of NRO beneficiaries on ECL.

Out of total 389 actives, 213 stocks declined, 145 stocks advanced, while the value of remaining 31 stocks remained unchanged.

Highest volumes were witnessed in Pace (Pak) at 38.82 million closing at Rs6.15 with a gain of 23 paisa, followed by Bank of Punjab at 21.80 million closing at Rs21.36 with a gain of 34 paisa, Bank Al-Falah at 20.41 million closing at Rs14.18 with a gain of five paisa, Japan Power at 13.96 million closing at Rs2.66 with a loss of 17 paisa, and TRG Pakistan at 8.28 million closing at Rs2.30 with a gain of 13 paisa.