Market Watch: KSE hits speed bump on institutional selling

Benchmark KSE-100 index falls 182.53 points.

KARACHI: The ongoing upward march of the stock market hit a speed bump on Thursday and ended the day with significant losses.

The main players of the day were cement companies and financial institutions as investors reacted to the upcoming announcement of the monetary policy.



At close, the Karachi Stock Exchange (KSE) benchmark 100-share index fell 0.53% or 182.53 points to close at 34,146.97.

Elixir Securities analyst Jawwad Aboobakar said equities closed in the negative zone, breaking a six-day winning streak. “Stocks opened positive, however, institutional selling dragged the index into the red with mainly financials taking the hit due to the investor’s firm view about a 100-basis-point cut in the discount rate over the weekend.”

Aboobakar said small caps led the volumes on retail investor participation while the wider market saw selective interest with Lafarge Pakistan (+1.4%) closing in the green and leading the volumes chart.

“Bestway Cement has announced a public offer to acquire 175 million shares of Lafarge Pakistan at Rs19.42 per share.”

Pakistan State Oil (-1.5%) closed lower as investors were somewhat disappointed over the funds released to reduce the circular debt following the fuel crisis. Engro Foods (-2.6%) ended its third day of losses after gaining a little over 20% in the month to date.

JS Global analyst Muhammad Mobeen said the cement sector faced pressure and major losers of the category were Maple Leaf Cement Factory (-3%), DG Khan Cement (-2.1%) and Lucky Cement (-1.5%) as investors opted to book profits before the monetary policy.

K-Electric (-3%) also came under pressure following the lapse of a dividend proposal, he said.

Trade volumes fell slightly to 307 million shares compared to 355 million on Wednesday.

Shares of 388 companies were traded. Of these, 267 declined, 104 closed higher and 17 remained unchanged. The value of shares traded during the day was Rs15 billion.



Lafarge Pakistan was the volume leader with 47.2 million shares, gaining Rs0.24 to close at Rs17.70. It was followed by Jahangir Siddiqui and Company with 31.2 million shares, losing Rs0.98 to close at Rs17.97 and Lotte Chemical with 20.3 million shares, gaining Rs0.38 to close at Rs8.12.

Foreign institutional investors were net sellers of Rs99 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, January 23^rd,  2015.

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