Market watch: Stocks continue to decline as index falls 61 points

Trading volume dwindles to 29-week low amid lack of investor interest.

KARACHI:

Bearish activity continued at the Karachi bourse on Wednesday with thin volumes in shares across the board, amid limited foreign and institutional interest.

The Karachi Stock Exchange’s (KSE) 100-share index fell 0.52 per cent or 61.37 points to end at 11,734.72 points.

Low activity in global capital markets, along with investor concerns over power and gas shortages in the country that have affected industrial output, played a significant role in the negative close of the Karachi market despite support from state-run funds, said Arif Habib Investments Director Ahsan Mehanti.

Expectations of handsome corporate earnings for the January-March quarter also could not spark investor interest.

Major oil, fertiliser and banking stocks received a heavy battering, particularly fertiliser shares which faced immense pressure during early trading, with news of several plants facing complete curtailment of gas supply by the Sui Northern Gas Pipelines, according to JS Global Capital analyst Mujtaba Barakzai. Engro Corporation’s share dropped  1.7 per cent to close at Rs198.8 on news that its new urea plant EnVen, scheduled to be restored yesterday was delayed by at least another day.

Additionally, the International Monetary Fund’s concerns that a delayed approach to the structural reforms programme could pose a threat to the country’s macroeconomic framework, affected investor confidence.

Subsequently, trade volumes continued the declining trend, dropping to a 29-week low of 45.82 million shares, compared with the previous day’s tally of 50.59 million shares.

Shares of 359 companies were traded on Wednesday. At the end of the day, 99 stocks closed higher, 170 declined and 90 remained unchanged. The value of shares traded during the day was Rs2.12 billion.

DG Khan (R) was the volume leader for the third consecutive day with 5.43 million shares, losing Rs0.13 to close at Rs4.8. Lotte Pakistan PTA attracted investor attention once again amid improved margins and stood second on the volume chart with 2.44 million shares, losing Rs0.05 to close at Rs15.72. It was followed by Kot Addu Power Company (Kapco) with 2.39 million shares, gaining Rs0.02 to close at Rs41.32.

Published in The Express Tribune, April 14^th,  2011.