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WEEKLY
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| KSE falls 84 points on political situation |
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Tuesday, November 24, 2009
By our correspondent
KARACHI: The local equity market on Monday turned bearish as political uncertainty grew over the controversial NRO issue as well as monetary policy review. Selling pressure was seen in the market throughout the day. The market started the day in the red and continued to be bearish till the close.
The KSE 100 Index decreased by 84.40 points closed at 9221.96levels. KSE 30 index posted a loss of 84.69 points closed at 9741.21 levels. Market Capitalization decreased and stood at Rs.2.661trillion as compare to Rs.2.686 trillion in the last trading session.
Furqan Punjani Research Analyst Topline Securities (Pvt) Ltd said that equity bazaar was evidently dominated by uncertainty on NRO issue which persuaded investors to adopt sell strategy.
Investors also remained cautious over monetary policy as less than 100bps cut could further deteriorate investors’ confidence. Upcoming long weekend also restricted investors to take fresh positions with overall volumes at 5-months low.
Fall in international oil prices and investor concerns over circular debt issue affecting oil refineries cash flows played a catalyst role in prevailing negative sentiment. Shallow market continued to face off-loading mainly in the main board stocks having reservations on revenue and payout streams by the local participants, as depleting turnover forced an early sell-off.
Although dollars inflow in index heavy weights during previous week did allow the index to maintain positive stance, amid low volumes, absence of support by the off-shore participants forced the float accumulated on anticipation of foreign support started making its way in the main stream, after an initial stagnation.
Absence of buyers on intervals forced low volume price erosion in the expensive stocks, and the benchmark went tumbling down and registered triple digit adjustment in early hours.
Resistance offered by index heavy weights, mainly government sector companies hovering in deep reds did stage recovery in closing hours, and momentum duly invited short covering thus allowing the index to regain some losses incurred during the session.
Hasnain Asghar Ali analyst at Aziz Fidahusein says that while low price stocks and stocks available at comparatively low multiples continued to invite accumulation by the retail and corporate participants, thereby allowing the turnover to keep ticking.
Unavailability of ready board leverage however disallowed change in the approach of short-term profit taking that continued even on mild recovery.
Absence of user friendly ready board leverage have indeed made the local bourses more sensitive to various political and security issues, which otherwise would not have impacted the market movement as the outcome from both fronts cannot be Even if upcoming monetary policy witnesses the realistic decline of 25-50 bps, absence of triggers and follow-up support have certainly restricted active participation in the local equities, at prevailing levels, Hasnain says.
Trading activity was minimal as compared to the last trading session as the Ready market volume stood at 76.07 million shares as compared to 140.32 million shares in the last trading session.
Future market volume decline to 1.9 million shares as compared to 2.445 million shares in the last session. Out of 372 companies 96 companies advanced, 260 declined and 16 remained unchanged.
Bank Alfalah was the volume leader with 15.46 million shares it closed at Rs14.26 down by one paisa, followed by Nishat (Chunian) with 5.07 million shares closed at Rs16.72 up by 52 paisa, Pak PTA Ltd with 4.23 million shares closed at Rs7.47 down by 15 paisa, Bosicor Pakistan with 3.29 million shares closed at Rs8.87 up by 23 paisa, Pace (Pak) Ltd with 2.83 million shares closed at Rs5.82 down by 18 paisa.
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ISSN 1563-9479 
