Stocks remain dull as volumes continue to fall

Stock market falls as investors prefer to remain sidelined over talk of a possible imposition of additional taxes.

The stock market fell on the back of thin trade as investors preferred to remain sidelined over talk of a possible imposition of additional taxes, political uncertainty and a hike in the key policy rate in next week’s monetary policy review.

The benchmark 100-share index at the Karachi Stock Exchange (KSE) ended 0.8 per cent, or 79.62 points, lower at 9,866.80.

The International Monetary Fund (IMF) in a report on Wednesday said that Pakistan has decided to introduce a temporary 10 per cent income tax surcharge, following the floods, which could generate up to 0.4 per cent of gross domestic product.

The State Bank of Pakistan is scheduled to announce the monetary policy on September 29 for the subsequent two months. The central bank raised its key policy rate by 50 basis points to 13 per cent in July and analysts expect another similar hike this time around as well.

Political tensions are running high as rumours regarding changes in the political set-up gain strength due to the standoff between the Supreme Court and the government over reopening of Swiss cases against President Asif Ali Zardari.

Volume fell to a more dismal 39.4 million shares compared with Wednesday’s 51 million shares.

The index is expected to trade between 9,800 and 10,150 points in the short term, said JS Global Capital analyst Murtaza Jafar in the company research report.

Foreigners were said to be buyers in the telecom sector while locals were seen active in third tier stocks, added Jafar.

Shares of 363 companies were traded on Thursday. At the end of the day, 131 stocks closed higher, 214 declined and 18 remained unchanged. The value of shares traded during the day was Rs1.17 billion.

PTCL was the volume leader with 2.99 million shares amid talk of foreign buying in the scrip. The stock fell Rs0.2 to close at Rs18.51.

It was followed by DG Khan Cement with 2.76 million shares losing Rs0.55 to close at Rs23.73 and Lotte Pakistan PTA with 2.48 million shares losing Rs0.18 to close at Rs8.4.

The top three volume leaders accounted for 19 per cent of the total volume traded during the day.

Published in The Express Tribune, September 24^th, 2010.