Stocks fall as approval hype lasts only a few hours

The stock market opened on a positive note gaining more than 100 points as the regulator approved the much-awaited margin trading system. However, investors booking profits at higher levels pushed the market into the negative zone by the close.

The Karachi Stock Exchange (KSE) benchmark 100-share index ended down 0.29 per cent or 29.43 points at 10,017.14.

The Securities and Exchange Commission of Pakistan (SECP) late on Wednesday approved a concept paper for the margin trading system in equity trade.

The SECP’s approval was taken positively by investors but there was some uncertainty over the launch date and modalities, said director of Arif Habib Investments Limited, Ahsan Mehanti.

Analysts have predicted different launching dates for the system, ranging from a week to three months.

Trade volumes fell to 90.2 million shares compared with Wednesday’s tally of 99.94 million shares.

International Monetary Fund (IMF) board’s approval of a $450 million emergency assistance for flood recovery and support of state-run funds boosted investor sentiment, added Mehanti.

Foreigners were said to be buyers in banks and power generation companies while locals were seen active in holding companies and third tier stocks, said JS Global Capital analyst Murtaza Jafar.

DG Khan Cement, which will announce its financial results for fiscal year 2010 on Friday, was the only blue chip among volume leaders.

Shares of 368 companies were traded on Thursday. At the end of the day, 172 stocks closed higher, 170 declined and 26 remained unchanged. The value of shares traded during the day was Rs2.85 billion.

Nishat Chunian Power was the volume leader with 8.25 million shares gaining Rs0.20 to finish at Rs10.45. It was followed by Jahangir Siddiqui and Company with 8.09 million shares falling Rs0.01 to close at Rs10.64 and Lotte Pakistan PTA with 5.69 million shares increasing Rs0.02 to close at Rs8.56.

Published in The Express Tribune, September 17^th, 2010.