Stocks shed 1.1pc as regulation effects awaited

Stocks lost more than one percent on Wednesday, as investors were anxious to know the outcome of regulatory measures after a broker default episode, dealers said.

Analyst Ahsan Mehanti at Arif Habib Limited said weak global crude prices and cautious activity on regulatory measures brought the market down.

Pakistan Stock Exchange (PSX) suspended its chief regulatory officer in a broker default case and the Securities and Exchange Commission of Pakistan directed the PSX to rectify its procedures.

The PSX’s KSE 100-share index shed 1.11 percent or 553.76 points to close at 49,214.15 points. KSE 30-share Index fell 1.13 percent or 303.70 points to end at 26,632.84 points. As many as 413 scrips were active; of which 102 increased, 297 decreased and 14 remained unchanged.

The ready market volumes stood at 417.525 million as compared to 353.066 million shares a day earlier. “Despite a positive open, wider market struggled to find a clear direction and traded in a narrow range in initial hours on limited participation,” said Faisal Bilwani, analyst at Elixir Securities. “Resumption of court hearing on Panama allegations kept investors attention diverted until midday.”

Market took a nosedive on reports of possible margin selling, while new regulations and measures to enhance and improve risk management gave a good excuse for equities to take correction.

Index names as well as retail-driven stocks came under pressure. K-Electric closed 1.7 percent lower as power regulator’s poking into its buyout deal sent jitters in the market. The KE’s acquisition is awaiting an approval from the National Electric Power Regulatory Authority.  

Fauji Cement closed 2.6 percent down as earnings – below than the market expectations – dented sentiments with most cement stocks closing lower in line with wider market direction. Al-Shaheer closed at upper price limit, while Fauji Foods too gained five percent as investors cheered UAE’s decision to lift ban on poultry imports from Pakistan.

Analysts expect volatility to continue as focus shifts from earnings to local politics, while 48,500 level would be a key support level. Companies, reflecting highest gains, included Wyeth Pakistan, which was up Rs106.66 to end at Rs4,370/share and Service Industries that rose Rs67.22 to close at Rs1,517.22/share. Companies, reflecting highest losses, included Sanofi Aventis, which was down Rs76.89 to close at Rs2,575/share and Hinopak Motors that fell down Rs54.01 to end at Rs1,621.25/share.

Highest volumes were witnessed in K-Electric with a turnover of 45.368 million shares. The scrip shed 17 paisas to close at Rs9.92/share. Power Cement was second with a turnover of 39.429 million shares. It inched up 78 paisas to end at Rs20.72/share. Media Times Limited was third with a turnover of 19.449 million shares. It rose 21 paisas to finish at Rs5.08/share.