Market watch: Index falls on concerns about falling foreign reserves

Benchmark KSE-100 index drops 30.35 points.

KARACHI: The stock market experienced a volatile trading session as concerns remained over shrinking foreign currency reserves with uncertainty about the selection of a new army chief.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.13% or 30.35 points to end at 23,768.35.

“Investors remained cautious as central bank reserves fell to $3.2 billion, which barely cover one month of imports,” said Muhammad Sibtain Mustafa of Elixir Securities. “However, the finance minister did pacify the market by explaining arrangements for bringing in $550 million in December.”

“Overall, it was a rather dull day when leading institutions preferred to stick to the sidelines waiting for November’s Consumer Price Index, which will be announced early next week and set the direction for future interest rates,” said Mustafa.



“Also, two days of foreign institutional selling have brought discomfort as global liquidity was the key driving force behind the recent rally.”

“The market took some relief after the prime minister decided on a new chief of army staff but participants were still concerned about two consecutive days of foreign portfolio selling,” Ovais Ahsan of JS Global said.

“Pakistan Telecommunication Company Limited (-1.9%) was among the major losers as talks between Etisalat and the government over the release of remaining $800 million of privatisation proceeds and complete transfer of properties remained in a state of limbo. Nestle (+5%) gained as investors were deprived of options in the sector after the delisting of Unilever and operational setbacks at Engro Foods,” he said.

Trade volumes fell to 98 million shares compared with Tuesday’s tally of 129 million.



Shares of 340 companies were traded on Wednesday. At the end of the day, 144 stocks closed higher, 166 declined and 30 remained unchanged. The value of shares traded during the day was Rs4.3 billion.

Fauji Cement was the volume leader with 10.55 million shares, gaining Rs0.26 to finish at Rs13.12. It was followed by PTCL with 10.51 million shares, losing Rs0.57 to close at Rs29.40 and Telecard Limited with 8.60 million shares, gaining Rs0.12 to close at Rs6.

Foreign institutional investors were net buyers of Rs133 million worth of shares during the trading session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, November 28^th, 2013.

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