Market Watch: Investors ‘moody’ as bourse seesaws into the red

Benchmark KSE-100 index falls 69 points.

KARACHI:

Despite opening positive on the last day of trading for the week, the bourse was dragged down by the announcement of lower-than-expected earnings from a frontline player in the fertiliser sector. The index’s fate was sealed for the day when Moody’s – a major international financial research company – cut its rating for Pakistan’s government bonds, leading investors to abandon positions en masse.

“Despite the positive outcomes of the Securities and Exchange Commission of Pakistan and Karachi Stock Exchange meeting yesterday, the market came under pressure after below-expectation half-yearly earnings announcement of Fauji Fertilizer Bin Qasim,” said equity dealer Samar Iqbal. “Further pressure was created after Moody’s downgraded Pakistan’s government bond ratings by one notch.”

The Karachi Stock Exchange’s (KSE) benchmark 100-share index shed 0.48% or 69.45 points to end at the 14,332.29 points level.

“Panic selling was witnessed in the second session in stocks across the board, ahead of major corporate earnings announcements at the KSE due next week,” added Ahsan Mehanti from Arif Habib Corp.

However, he added that: “Institutional support was witnessed in blue chip stocks on improvement in Pakistan-US relations, despite concerns for Supreme Court action on the NRO implementation case against the prime minister.”

Trade volumes improved marginally to 112 million shares, compared with Thursday’s tally of 109 million shares. The value of shares traded during the day was Rs4.43 billion.

Shares of 362 companies were traded on Friday. At the end of the day 104 stocks closed higher, 139 declined, while 119 remained unchanged. DG Khan Cement was the volume leader with 24.18 million shares gaining Rs0.43 to finish at Rs43.49. It was followed by Fauji Fertilizer Bin Qasim with 10.55 million shares losing Rs1.88 to close at Rs38.72 and Fatima Fertilizer with 7.42 million shares losing Rs0.09 to close at Rs25.00.

Foreign institutional investors were buyers of Rs89.33 million and sellers of Rs86.35 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, July 14^th, 2012.