Stocks remain dull as volumes keep falling

KSE’s benchmark 100-share index falls 59.8 points

Stocks remained dull on Friday as investors stayed on the sidelines following a downgrade of ratings of top five banks by Moody’s and deepened differences between SECP and KSE brokers.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.61 per cent or 59.8 points to end at 9,703.06 points.

The only excitement was seen in JS Large Cap Fund with over 20 million shares changing hands ahead of its de-listing, highlighted JS Global Capital analyst Arsalan Khan. The stock will shift from the status of close-ended to an open-ended fund on September 9.

Volumes fell to a dismal 38 million shares from Thursday’s 43.82 million shares with JS Large Cap Fund accounting for more than half of the shares.

The assistance from the International Monetary Fund (IMF) sent a good signal but was overshadowed by the change in outlook by Moody’s, the rift at KSE and the economic consequences of the floods, dealers said.

The IMF announced on Thursday an additional $450 million in emergency assistance to help the country deal with the aftermath of the floods.

Moody’s Investors Service changed to negative from stable the outlook on long-term local currency deposit ratings and financial strength ratings of the country’s five leading banks due to economic damages caused by the floods.

The country’s five leading banks include Allied Bank Limited, Habib Bank Limited, MCB Bank, National Bank of Pakistan and United Bank Limited.

Members of the KSE have decided to challenge the Securities and Exchange Commission of Pakistan (SECP) over changes in the board of directors of the bourse, which has widened differences between the two sides.

Not much excitement is seen in short trading next week, said Mohammad Rameez, equity dealer at Elixir Securities. Markets will be closed from September 10 to 13 on account of Eidul Fitr holidays.

Shares of 298 companies were traded on Friday. At the end of the day, 100 stocks closed higher, 175 declined and 23 remained unchanged.

JS Large Cap was the volume leader of the day. The scrip remained unchanged at Rs5.

It was followed by Jahangir Siddiqui and Company with 1.56 million shares decreasing Rs0.04 to close at Rs10.01 and Lotte Pakistan PTA with 1.32 million shares losing Rs0.2 to close at Rs8.09.

Published in The Express Tribune, September 4^th, 2010.