MCB Bank becomes a stumbling block; breaks the bull run

Benchmark KSE-100 index falls 25 points.

KARACHI: The Karachi bourse closed in the red after six consecutive sessions of gains. The correction was triggered by a below market expectation results of MCB Bank, the largest bank by market capitalisation. The earnings announcement – which was still fairly impressive - gave the bourse a reason to correct and investors to book profits.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.14% or 25.2 points to end at 17,383.32 point level. Trade volumes fell marginally to 311 million shares compared with Wednesday’s tally of 336 million shares.

“The MCB result gave investors a reason to book profits earned in the recent rally while other blue-chips also found the excuse to correct,” reported Muhammad Rawjani, analyst at Elixir Securities.

Pakistan Telecommunication Company, a prominent laggard in yesterday’s session, also pulled the index down as profit taking after a set in after an impressive fortnightly rally of 15% on market rumours of a cash dividend with December-end results, according to JS Global Capital analyst Ovais Ahsan.

The fertiliser sector also lost ground after no official confirmation of rumours of a new excess gas supply plan from the Mari field which had been circulating earlier in the week.

Shares of 372 companies were traded on Thursday. At the end of the day 127 stocks closed higher, 188 declined while 57 remained unchanged. The value of shares traded during the day was Rs5.07 billion.

Small and mid cap stocks remained investors favourites as major activity was seen in second and third-tier stocks like telecommunications, cement and banking ahead of their results.

TRG Pakistan was the volume leader with 55.67 million shares shedding Rs0.46 to finish at Rs7.82. It was followed by Telecard with 26.59 million shares gaining Rs0.13 to close at Rs4.69 and Worldcall Telecom with 25.4 shares climbing Rs0.06 to close at Rs3.55.

Foreign institutional investors were net buyers of Rs409.4 million and net sellers of Rs267.2 million, according to data maintained by the National Clearing Company of Pakistan Limited.

“The market will take cue from today’s monetary policy statement with analysts expecting a status quo in-line with market consensus,” said Ahsan.

Published in The Express Tribune, February 8^th, 2013.

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