Market watch : Market gains lost ground amid low volumes

Investors on sidelines ahead of monetary policy announcement.

KARACHI: Midway through the week, investor optimism resurfaced on anticipations of an upcoming cut in the benchmark interest rate, helping the market recover some lost ground. The bourse peaked above 16,800 points in the early hours of trading; however, selling pressure forced it to pare gains and close with modest improvement. Investor participation continued to decline in line with this week’s trends.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index regained 0.26% or 42.91 points to end at the 16,744.60 points level. Trade volumes shrank to 112 million shares compared with Tuesday’s tally of 127 million shares. The value of shares traded during the day was Rs3.24 billion.

“Lack of triggers and low institutional interest shifted activity to second and third tier stocks. as retail investors churned volumes in penny stocks,” reported Elixir Securities analyst Haris Ahmed Batla.

“Selective profit-taking was also evident, but attractive valuations did lure investors somewhat towards the banking, oil and cement sectors,” said JS Global analyst Mujtaba Barakzai. “Investors have also started to tilt towards defensive stocks with high dividend yields, keeping in view the upcoming monetary policy.”

“The Oil and Gas Development Company (+1.1%) gained on the Economic Coordination Committee’s approval to increase gas wellhead prices of the key Qadirpur field,” reported Batla. “Reported selling from state-owned institutions resisted gains made by Fauji Fertilizer, despite a 26% quarter-on-quarter increase in its urea off-take.”

“Large cement companies like DG Khan Cement and Lucky Cement also witnessed some buying,” added Topline Securities equity dealer Samar Iqbal.

Lotte Pakistan PTA was the volume leader with 11.45 million shares gaining Rs0.20 to finish at Rs7.85. It was followed by Jahangir Siddiqui and Company with 6.39 million shares losing Rs0.17 to close at Rs17.09 and Byco Petroleum with 4.68 million shares gaining Rs0.15 to close at Rs10.92.

Foreign institutional investors were net buyers of Rs159.34 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, December 13^th, 2012.