KARACHI: The stock market witnessed another dull trading session, which saw it close with only a couple of points gained. Investors had relegated themselves to the sidelines in anticipation of the State Banks’ monetary policy announcement due Friday late afternoon, unsure whether a cut in the central bank’s benchmark policy rate would be announced or not.
“Dull activity was seen in the market as investors remain uncertain on the discount rate cut in the upcoming monetary policy. Some profit-taking was seen in fertiliser stocks due to news about a likely reduction in urea prices; while major activity was seen in mid-cap stocks,” said Topline Securities Senior Manager Equity Sales Mohammad Rizwan.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index crawled up 0.01% or 1.90 points to end at the 14,761.49 points level. Trade volumes plummeted to 36 million shares compared with Thursday’s tally of 74 million shares. The value of shares traded during the day was Rs1.52 billion.
“Second and third-tier stocks dominated volumes,” concurred JS Global analyst Ahmed Rauf. “Pakistan State Oil remained the outperformer after announcing a bonus issue yesterday. It closed up 1.8% with volumes of 1.2 million shares.”
Shares of 269 companies were traded on the last trading day of the week. At the end of the day 117 stocks closed higher, 101 declined while 51 remained unchanged.
Quice Food was the volume leader with 3.43 million shares losing Rs0.92 to finish at Rs3.01. It was followed by Maple Leaf Cement with 3.16 million shares gaining Rs0.16 to close at Rs7.54 and the Karachi Electric Supply Company with 2.74 million shares closing flat at Rs4.27.
Foreign institutional investors were net buyers of Rs111.35 million, according to data maintained by the National Clearing Company of Pakistan Limited.
The State Bank has announced a rate cut of a significant 150 basis points, which will help recover some profitability for highly-leveraged companies and help boost investor sentiment in key stocks that have been struggling so far.
Published in The Express Tribune, August 11th, 2012.