Activity remained confined in second and third tier stocks with the telecom sector taking a beating and most of the other stocks closing in the red.
KARACHI: As the earnings season draws to its end, the Karachi market was not able to sustain its upward momentum. The local bourse succumbed to the pressure of depleting reserves and a weak macroeconomic outlook as institutional investors led with selling, pulling the market to close below the 18,000-point level.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.7% or 125.61 points to end at the 17,894.89 point level. Trade volumes shrunk to 313 million shares compared with Monday’s tally of 322 million shares.
The KSE witnessed a volatile second half with Engro Corporation, Pakistan Telecommunication Company (PTCL) and MCB Bank saw selling by leading institutions, reported Sibtain Mustafa, analyst at Elixir Securities.
Activity remained confined in second and third tier stocks with the telecom sector taking a beating and most of the other stocks closing in the red.
Shares of 372 companies were traded on Tuesday. At the end of the day 86 stocks closed higher, 242 declined while 44 remained unchanged. The value of shares traded during the day was Rs8.88 billion.
Leading oil stocks continue to hold ground where Pakistan Oilfields attracted buying as investors seek entitlement to receive the declared dividend of Rs20 per share, while Pakistan State Oil (PSO) was being accumulated on expectation of increase in oil marketing company’s margins in high-speed diesel and petrol which could likely push the company’s earnings per share up by Rs7.6-8 per share. PSO fell Rs0.68 to close at Rs242.06 during Tuesday’s trading session.
The telecom sector which had been outperforming the market in the previous few sessions hit a roadblock in yesterday’s trading. Previously, the telecom sector initiated its bull run on the back of the news that the Lahore High Court’s interim decision of suspending the international clearing house (ICH) was overrules by the Supreme Court. The higher international call rates under the ICH arrangement aided the telecom sector in posting exponential growth in earnings.
Telecard was the volume leader with 67.36 million shares losing Rs0.54 to finish at Rs7.42. It was followed by Azgard Nine with 19.26 million shares falling Rs0.3 to close at Rs8.29 and Pakistan Telecommunication Company with 17.86 million shares shedding Rs0.26 to close at Rs23.38.
Foreign institutional investors were buyers of Rs223 million and sellers of Rs173 million, according to data maintained by the National Clearing Company of Pakistan Limited.
Analysts say that with 18,000-level acting as a resistance, they believe the market to further go down as immediate outlook in the midst of end of the earnings season, weak macroeconomic scenario and the end of the incumbent government’s tenure will keep interest limited.
Published in The Express Tribune, February 27th, 2013.
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