KARACHI: The stock market fell 286 points on the first trading day of the week as investors remained on the sidelines due to uncertainty over the extent of damage caused by the floods.
The benchmark 100-share index at the Karachi Stock Exchange (KSE) fell by 2.91 per cent to close at 9,537.13 points on Monday.
United Nations Secretary-General Ban Ki-moon, during his visit to Pakistan, said that the devastation was the worst he had ever seen and promised more emergency funding for relief operations.
Furthermore, rumours over the abandonment of the margin trading product kept the market jittery and only 64.3 million shares were traded during the day.
“There were rumours that the introduction of the margin trading system has been delayed till December because some serious issues have been raised,” commented an analyst.
He added that foreign investors had switched funds from the fertiliser and banking sectors to oil companies and other corporations specialising in fast moving consumer goods.
Shares of 349 companies were traded on Monday. At the end of the day, 57 stocks closed higher while 282 declined and 10 remained unchanged. The value of the shares traded during the day was Rs2.09 billion.
“Increased fear of flood related devastation and impact on the national economy led investors to sell,” according to Nazim Abdul Muttalib of Elixir Securities.
With 4.58 million shares traded, Lotte Pakistan PTA was the volume leader. The company’s stock lost 7.7 per cent during trade to close at Rs6.95 per share.
TRG Pakistan followed with a trade volume of 3.65 million shares. The scrip lost Rs0.69 from last week’s closing of Rs3.65 to settle at Rs2.96 per share.
Pakistan Tobacco Company (PTC) emerged as the third volume leader, with 3.57 million shares traded during the day. The PTC stock fell by Rs0.08 to close at Rs18.75 per share.
“PTC saw selling pressure on news of flood related losses while local investors booked profit in Hubco for alternative investment opportunities,” pointed out Samar Iqbal, an equity dealer.
“From a technical standpoint, we believe that the index is likely to continue its correction,” read a report prepared by IGI Securities.
Published in The Express Tribune, August 17th, 2010.
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ