KARACHI: Karachi’s stock market showed its first signs of recovery on Wednesday after losing 442.8 points in the last two trading days and 400.55 points in the previous week, which was its sharpest decline in 30 weeks.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index recovered 183.11 points to end at 9,611.55 points. The market was somewhat volatile when the trading session began and went to an intraday low of 9,355 points. Value buying at lower levels changed the sentiment in favour of the bulls. Stocks increased by 1.9 per cent after having fallen to a two-and-a-half-month low because investors reaped the benefits of the KSE’s recent fall by buying cheap shares.
Pakistan’s market recovered almost all the losses from yesterday on the back of value buying by long-term investors, said JS Global Capital analyst, Muzzamil Mussani. “Recovery in regional markets also strengthened investors’ confidence and they continued to trade small priced stocks due to their limited downside,” said Topline Securities analyst, Furqan Punjani. Dealers said investors were still cautious because of uncertainty over the next fiscal year’s budget which is due to be announced on June 5.
Trading activity was down; volumes had decreased by 19.3 per cent to 109.13 million shares on Wednesday as compared to 135 million shares on Tuesday. The majority of the investors are still on the sidelines due to their apprehensiveness about the upcoming budgetary measures, said Mussani. He added that this was reflected in the volumes in the ready market, which were down, stood at 109mn shares as compared to 135mn shares traded on Tuesday – lower by 19 per cent Blue chip stocks were being traded and exchange value stood at Rs4.54 billion, down 14.3 percent on Wednesday as compared to Rs5.3 billion on Tuesday.
Most of the stocks that were in the spotlight went up. Out of the 413 stocks which were traded during the day, 261 were up, 136 were down. The price of 16 stocks remained unchanged. “All blue chip items closed in the green; Pakistan Oil Fields was up 1.8 per cent, MCB Bank was up 2.7 per cent, Oil and Gas Development Corporation was up by 2.3 per cent and the National Bank of Pakistan was up by 3.9 per cent,” reported Mussani Lotte Pakistan was the volume leader for the third day in a row with 14.9 million shares traded. Its price went up by Rs0.46 to Rs9.56. On Tuesday there were 14.4 million shares traded and its stock price decreased by Rs0.63 to end at 9.10.
Day before that there had been 12.72 million shares traded and the stock had gained Rs0.03 to close at Rs9.73. JS Corporation was the second volume leader with 10.9 million shares. Its stock went up by Rs0.18 to end at Rs13.67. Engro was the only volume leader whose price decreased. Shares traded were 4.6 million and its price went down by Rs1.90 to end at Rs179.83.
Published in the Express Tribune, May 27th, 2010.