Market watch : Bourse experiences volatile trading, trend may continue

Benchmark KSE-100 index falls 25.66 points

KARACHI: Stocks closed marginally negative in a highly volatile trading session on Tuesday that tested investor nerves.

At close, the Karachi Stock Exchange (KSE) benchmark 100-share index fell 0.08% or 25.66 points to end at 32,983.47.



Elixir Securities, in its report, said stocks opened lower because of panic in early trade after the Federal Investigation Agency (FIA) raided offices of AKD Securities on Monday evening and arrested the senior management including the CEO on charges of manipulation that allegedly resulted in losses to a state-run pension fund some five years ago.

“The benchmark index further fell to test 32,500 levels on thin volumes after reports surfaced of few brokers shutting shops in protest against the arrests,” it said.

“However, late reports about the brokers returning to business and a positive news that the interior minister has called for a fair inquiry and requested the broker community to wait for investigations, shifted the direction with buying led by high net-worth individuals and select institutions in cement and value plays,” said the report.

The market was expected to trade volatile near 33,000 points as news flow over the ongoing broker inquiry along with foreign flows would keep investors on the lookout, it added.

Meanwhile, JS Global analyst Ahmad Saeed Khan was of the view that volatility prevailed in the trading session as the index recovered from a 1.5% intraday decline to close marginally down.

“The cement sector led the recovery as declining coal prices, increasing local dispatches and profitability kept investors interested in the sector,” he said.

“Top gainers of the sector were Dera Ghazi Khan Cement (+1.03%) and Maple Leaf Cement (+1.36%).”



Pak Suzuki Motor Company (+2.39%) rallied on the back of recent price hikes by the carmaker as the automobile sector closed the day in the green zone, Khan said.

“Moving forward we expect the market to remain volatile and recommend buying on dips with the cement sector looking attractive on favourable sector dynamics and upbeat demand,” he said.

Trade volumes rose to 142 million shares compared with Monday’s tally of 110 million.

Shares of 326 companies were traded. At the end of the day, 126 stocks closed higher, 171 declined while 29 remained unchanged. The value of shares traded during the day was Rs8.6 billion.

Pak Elektron was the volume leader with 17.4 million shares gaining Rs1.90 to finish at Rs68.32. It was followed by TRG Pakistan with 10.5 million shares losing Rs0.64 to close at Rs34.59 and Maple Leaf Cement with 8.2 million shares gaining Rs1.08 to close at Rs80.46.

Foreign institutional investors were net buyers of Rs268 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, January 6^th, 2016.

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