Market watch: Lack of triggers keeps investors sidelined

Falling index heavyweights pull directionless bourse down 90 points.

KARACHI: Lacklustre activity at the country’s largest stock market continued for second consecutive day, where volumes remained negligible and investors opted to stay on the side-lines waiting to pounce on any opportunity for selling.

The local bourse had been lacking a sense of direction in the light of no triggers except political (un)certainty guiding direction.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index shed 0.5% or 89.76 points to end at the 17,872.15 point level. Trade volumes stayed paltry, clocking in at 150 million shares compared with Monday’s tally of 154 million shares.

“In absence of any triggers, investors preferred to stay on the sidelines as volumes remained low,” reported Samar Iqbal, head of equity sales at Topline Securities. “Decline in the index-heavyweights, Oil and Gas Development Company (OGDC) and MCB Bank, took their toll on the index, while investor interest seemed to shift towards dividend yielding stocks,” added Iqbal.

On the political front, under negotiation decisions on Punjab’s caretaker chief minister and interim finance minister were key areas of concern for traders, said JS Global Capital analyst Mujtaba Barakzai.

Fertiliser and oil stocks witnessed the brunt of profit-taking, where Engro Corporation, OGDC and Pakistan Oilfields closed in the red. On the other hand, the telecom sector managed to sustain levels despite reporting lower international incoming calls.

Shares of 327 companies were traded on Tuesday. At the end of the day 112 stocks closed higher, 173 declined while 42 remained unchanged. The value of shares traded during the day was Rs3.83 billion.

Dividend-yielding stocks such as Hub Power Company (Hubco) were in the limelight managing to close in black. On Monday, Hubco announced that the 84 megawatt New Bong Hydropower Project, owned by Hubco’s 75% held subsidiary Laraib Energy, started operations two months ahead of schedule. The project will have a positive earnings impact on the parent’s income statement.

Pakistan International Airlines was the volume leader with 38.8 million shares gaining Rs0.58 to finish at Rs7.4. It was followed by TRG Pakistan with 11.8 million shares falling Rs0.21 o close at Rs7.6 and Fauji Cement with 10.52 million shares losing Rs0.11 to close at Rs8.42.

Foreign institutional investors were buyers of Rs181.21 million and sellers of Rs153.74 million, according to data maintained by the National Clearing Company of Pakistan.

Published in The Express Tribune, March 27^th, 2013.

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