Market watch: Adverse security situation takes its toll on KSE

Benchmark KSE-100 index falls 53 points.

KARACHI: The country’s largest stock market closed down for the third successive day signalling an end to the bull run, not due to weakening fundamentals but because of the worsening law and order situation in the city. Though the bourse looked stable in the first half, panic selling pulled the bourse down in the second.

The benchmark KSE-100 index swung in wide ranges touching a low of 17,953 points and a high of 18,171.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index shed 0.29% or 52.87 points to end at the 18,000.45 point level. Trade volumes improved to 341 million shares compared with Tuesday’s tally of 225 million shares.

“Profit taking was witnessed in majority of the sectors by local institutions and individuals as panic spread amongst investors due to the unravelling peace situation in the city,” reported Fahad Ali, analyst at JS Global Capital. Apart from the late selling, the market traded positive for a large part of the day with cement stocks being the favourites over rumours of a cement price hike, said Elixir Securities analyst Muhammad Rawjani.

The value of shares traded during the day was Rs9.33 billion.

On the brighter side, Attock Refinery managed to close in black on expectations of deemed duty – custom and surcharge duties on import of oil – being raised from 7.5% to 9% in the Economic Coordination Committee meeting today. This mechanism favours the local refineries as they will get extra margin on the production of light diesel oil and kerosene.

The telecom sector plunged on the back of news that the Competition Commission of Pakistan has issued a show cause notice to all long distance operators asking to explain the rates on international incoming calls in a hearing which will take place on March 12.

News of increase in cement prices by Rs10 per bag kept sentiments alive in the cement sector where Maple Leaf Cement was the star performer closing up 4.1%.

On the retail side, reports of an increase in import tax on purified terephtalic acid (PTA) drew significant investor interest in Lotte Pakistan.

Lotte Pakistan was the volume leader with 62.94 million shares falling Rs0.17 to finish at Rs7.82. It was followed by Fauji Cement with 28.76 million shares losing Rs0.07 to close at Rs8.23 and Lafarge Pakistan with 25.98 million shares gaining Rs0.12 to close at Rs5.89.

Foreign institutional investors were buyers of Rs518.69 million and sellers of Rs337.32 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, March 7^th, 2013.

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