Stocks down, volumes drop further

KARACHI: The stock market fell on Tuesday as negative sentiments prevailed throughout the day. The seemingly inevitable revision in the growth target, outcome of Pakistan’s meeting with the International Monetary Fund (IMF), financial results below expectations and unconfirmed estimates of damage caused by the floods, all contributed to keeping investors away from the Karachi Stock Exchange.

Furthermore, “Moody’s stated that Pakistan has a lower chance of securing an upgrade in its credit rating in the forthcoming review owing to the devastating floods, however it ruled out a downgrade from the current rating of B3,” wrote Jawad Khan from JS Global Capital.

The benchmark 100-share index fell by 174.93 points to close at 9,637.17 on Tuesday.

“This weekend’s meeting with the IMF, which could possibly see a lowering of GDP targets, led to investor wariness,” according to Sibtain Mustafa from Elixir Securities.

Only 39.7 million shares were traded during the day, about 20 per cent less than Monday’s trade volume of 50.8 million shares.

“There was no particular event during the day that caused the market to fall but it is part and parcel of the overall downward trend seen in the wake of the floods,” commented Hamad Aslam, Research Head at BMA Capital.

Shares of 354 companies were traded on Tuesday. At the end of the day, 105 stocks closed higher while 230 declined and 19 remained unchanged. The value of the shares traded during the day was approximately Rs1.26 billion.

The Lotte Pakistan PTA scrip recorded a trade volume of 4.72 million shares, making it the market leader for the day. The company’s stock fell for a second day in a row, this time by Rs0.14 to close at Rs7.89 per share.

National Bank of Pakistan (NBP) followed with 2.56 million shares traded during the day. “All blue chips closed in the red. NBP saw major battering after lower-than-expected first half earnings, with the stock closing 4.7 per cent below Monday’s level,” highlighted Khan.

The NBP scrip closed at Rs62.63 per share after shedding Rs3.08 because of the increased selling pressure.

Silkbank Limited emerged as the third market leader with a trade of 1.97 million shares.

Published in The Express Tribune, August 25^th, 2010.