Market watch: Bourse stays volatile as cement sector shatters confidence

Benchmark KSE-100 index falls 113 points.

KARACHI:

Volatility continued to prevail at the local bourse as morning gains were wiped out in the later session, pulling the index down to close in the red with the cement sector and index-heavy financial stocks taking a beating, while sentiments were already shaken up due to falling regional markets.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index shed 0.48% or 113 points to end at 23,487.23 point level. Trade volumes rose to 183 million shares compared with Monday’s tally of 156 million shares.

The market was in the black throughout the day, touching an intraday high of 23,808 points, however prevailing uncertainty on the monetary policy announcement of the State Bank of Pakistan due this week, sparked a bearish trend, reported Mujtaba Barakzai, analyst at JS Global Capital. Moreover, the prime minister’s first address to the nation also failed to bring much confidence in the market, Barakzai added.



While Topline Securities Assistant Vice President Muhammad Rizwan adds that falling regional stock markets and currencies affected the local bourse also.

Shares of 424 companies were traded on Tuesday. At the end of the day 124 stocks closed higher, 224 declined while 76 remained unchanged. The value of shares traded during the day was Rs8.61 billion.

The highly-leveraged cement sector, which was already facing a downturn due to ambiguity surrounding interest rate environment going ahead, faced another blow after the National Electric Power Regulatory Authority issued a formal notification of a hike in electricity rates.

The banking sector, too, remained under pressure despite strong expectations of discount rate hike in the monetary policy announcement.



The power sector, except Kot Addu Power Company, also stayed bullish as the newly-listed Lalpir Power began trading hitting its upper lock from its placement price of Rs22 per share.

Gains in Pakistan Petroleum ahead of earnings announcement, Hub Power Company and Bank Alhabib were also not enough to spur any confidence.

Bank of Punjab was the volume leader with 28.79 million shares falling Rs0.58 to finish at Rs13.05. It was followed by Fauji Cement with 14.87 million shares losing Rs0.26 to close at Rs14.71 and Sui Southern Gas Company with 6.96 million shares gaining Rs1.24 to close at Rs26.08.

Foreign institutional investors were buyers of Rs528 million and sellers of Rs313 million, according to data maintained by the National Clearing Company of Pakistan.

Published in The Express Tribune, August 21^st, 2013.

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