The benchmark KSE-100 index posted early gains, crossing the psychological level of 10,000 during the session. But the enthusiasm petered out later and profit-taking was witnessed near the end of the session. By the closing bell, the KSE-100 index had inched higher by 4.67 points to close at 9,979.
Trading volumes fell 63 per cent to a dismal 64.07 million shares compared with Friday. Likewise, total number of trades also fell to 49,739 against 63,480 during the previous trading session.
Analysts say that most investors are looking at ongoing negotiations between KSE, Securities and Exchange Commission of Pakistan (SECP) and other stakeholders concerning the introduction of margin trading as well as a framework for lending and borrowing of securities before assuming fresh positions.
“Mixed rumours regarding main features of the newly-designed leverage product kept market-men confused, since the features were not made public. Only the privileged were able to release information about the product according to their market positions,” said a senior analyst of Aziz Fida Husain Securities, Hasnain Asghar Ali.
The broader market also remained directionless in the first trading session of the week. In all, shares of 381 companies were traded. Of these 204 declined, 162 posted gains while 15 remained unchanged.
Shehzad Chamdia, Chief Executive Ehsan Mehanti, attributed market stability to “renewed foreign interest and recovery in global capital markets.”
Rise in international oil prices could play a catalyst role in generating positive activity during upcoming result announcements, said Mehanti.
However, most analysts have advised investors to remain cautious in upcoming trade sessions as consistently low volumes could bring volatility to stock prices.
Hasnain Asghar Ali said that if the leverage product is delayed or complicated, economic issues like inflation and weaker local currency could discourage investors from trading in high-priced main board stocks.
“Profit-taking from offshore participants amid low volumes can also erode equity prices in coming sessions,” said Mehanti.
Highest volumes were witnessed in Byco Petroleum. Around 7.572 million shares of Byco were traded and the stock gained Rs0.49 to end at Rs12.56.
Trading volumes in Dera Ghazi Khan Cement and Jahangir Siddiqui and Co stood at 5.61 million and 3.62 million shares, respectively.
Foreign inflows continued to add strength to local sentiments. Foreign investors made net investments worth $0.88 million during the session, according to the NCCPL.
Published in The Express Tribune, July 13th, 2010.
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