Stocks range bound as investors remain on the sidelines

KARACHI: Stocks closed range bound on Monday as investors remained on the sidelines waiting for clarity over the margin product and concerns of a possible rate hike in the upcoming monetary policy.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index ended 0.11 percent or 10.61 points higher at 10,063.58 level.

Moreover, Securities and Exchange Commission of Pakistan (SECP) chairman’s visit to the exchange failed to generate any substantial excitement, said Elixir Securities dealer Nazim Abdul Muttalib.

The market is expected to remain range bound in absence of any major catalyst ahead of the monetary policy announcement on 29th, added Muttalib.

The SECP last week approved the concept of margin trading system but uncertainty over the launch date and modalities prevail.

Volumes remained sluggish at 65 million shares compared with Friday’s 66.5 million as the recent approval of margin trading system failed to provide a sustained positive impetus and depth in volumes, analysts said.

Expectations of deregulation of petroleum products prices and release of funds to Pakistan State Oil easing circular debt crises in the petroleum sector kept strong investor interest the sector, said analysts.

PSO gained 0.9 per cent on news that it had received Rs12 billion from the finance ministry and resuming oil supply to Hub Power Company (Hubco) and Kot Addu Power Company (Kapco).

Nishat Power Limited gained 4.9 per cent during the day as locals build position in this power producer yielding over 24 per cent, analyst said.

UBL Bank closed 3.1 per cent in the red on reported foreign selling and worries over bank’s bad loans and impact on earnings going forward, said Muttalib.

Shares of 400 companies were traded on the opening day of the week. At the end of the day 174 stocks closed higher, 201 declined while 25 remained unchanged. The value of shares traded during the day was Rs2.27 billion.

Foreign investment institutions were reported sellers of UBL Bank and MCB Bank scrips with local buying in Nishat Power Limited, Pakistan Oilfields, DG Khan Cement and Engro, added Muttalib.

Lotte Pakistan PTA was the volume leader with 10.3 million shares gaining Rs0.33 to finish at Rs8.85. It was followed by Nishat Power with 5.65 million shares increasing Rs0.54 to close at Rs11.5 and New Jubilee Life Insurance with 5.46 million shares losing Rs0.46 to close at Rs43.

Published in The Express Tribune, September 21^st, 2010.