Index gains 0.43 per cent despite low volumes

KARACHI: The stock market closed with moderate gains on Tuesday as volumes remained dismal ahead of the Eid holidays. Uncertainty about the implementation of the margin trading system also kept investors away from the market.

“Energy stocks witnessed some fresh local buying in response to market rumours of continued foreign inflows, but managed only marginal gains,” commented Jawad Khan from JS Global Capital. Another analyst commented that foreign interest in state-run funds towards the end of the trading day helped give the index a push.

The benchmark 100-share index of the Karachi Stock Exchange (KSE) gained 42.04 points, or 0.43 per cent, to close at 9,748.14 points. The recorded turnover was only 19.3 million shares, even less than the two-month low volume of 19.63 million shares witnessed on Monday.

“Another dull session was witnessed ahead of Eid holidays as investors preferred to stay sidelined,” said  Samar Iqbal, a local equity dealer.

Low volumes seem to be a typical characteristic of the last few days of Ramazan. Ahsan Mehanti, Director at Arif Habib Investments Limited, said that the exceptionally low volumes seen on Tuesday were because Monday night was Laylatul Qadr, one of the holiest nights of the Muslim calendar.

Shares of 323 companies were traded on Tuesday. At the end of the day, 160 stocks closed higher while 145 declined and 18 remained unchanged. The value of the shares traded during the day was approximately Rs1.02 billion.

Arif Habib Securities (AHSL) led the market with 1.33 million shares traded. The scrip closed 2.5 per cent higher at Rs22.56 per share.

JS and Company (JSCL) followed with a trade volume of 1.11 million shares. The company’s stock gained Rs0.08 to close at Rs10.01.

“Volumes were led by traders pick AHSL and JSCL indicating retailers’ re-entry and possible hopes of good news on margin finance (leverage) post-Eid holidays,” pointed out Faisal Bilwani from Elixir Securities.

Azgard Nine was the third market leader as the company’s scrip saw a turnover of 0.99 million shares.

According to Jawad Khan from JS Global Capital, however, Millat Tractors Limited stole the show as the scrip gained 3.4 per cent after announcing a massive ‘payout’ last week.

Published in The Express Tribune, September 8^th, 2010.