The stock market remained volatile today, as confused investors couldn’t decide on a direction to take resulting in a cyclical graph.
In the end the Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.1% or 21.6 points to end at 22,214.73 points.
“The day started on a disappointing note with Pakistan State Oil (PSO PA -3.48%) announcing its FY13 earnings below estimates at Earning Per Share (EPS) of Rs50.84, cash payout of Rs2.5 per share while investors were left waiting in vain for a stock payout. Afternoon news of Lucky Cement (LUCK PA -2.9%) resigning from the All Pakistan Cement Manufacturers Association instilled further panic and left all cements in mourning.” Said Fareesa Baig of Elixir Securities.
The mid-day rumour sent cement stocks hurtling as the once powerful cartel sets up for a possible fight and even a price war.
“The market remained volatile during the day battling between the red and green zone. A confused state of mind was observed between investors where they opted to stay sidelined and wait for the market to settle in one direction.” Said Fahad Ali of JSGlobal, adding that “Rumors in the market vis-à-vis the cement sector of the cartel breaking leading to a price-war led the prices to fall considerably.”
The cement speculation put the sector, which so far has had complete control over pricing resulting in impressive profit margins, at a crossroads.
Trade volumes fell to 177 million shares compared with Wednesday’s tally of 265 million shares.
Shares of 342 companies were traded on Thursday. At the end of the day 91 stocks closed higher, 214 declined while 37 remained unchanged. The value of shares traded during the day was Rs7.4 billion.
Fauji Cement was the volume leader with 20.1 million shares losing Rs0.61 to finish at Rs13.49. It was followed by Bank of Punjab with 20 million shares losing Rs0.28 to close at Rs11.71 and Maple Leaf Cement with 10 million shares losing Rs1.11 to close at Rs25.16.
Foreign institutional investors were net sellers of Rs78 million, according to data maintained by the National Clearing Company of Pakistan Limited.
Published in The Express Tribune, August 30th, 2013.
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