Market watch: KSE retracts ahead of monetary policy announcement

Benchmark KSE-100 index drops 9.47 points.

KARACHI: The stock market remained volatile today as investors repeatedly went through buying and selling cycles.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.04% or 9.47 points to end at 23,222.21 points.

“Optimism that the market was now gearing towards 24,000 was shattered today as the market oscillated several times within a band of 150 points and finally settled in the red,”said Muhammad Raza Rawjani of Elixir Securities.



“Market participants, after yesterday’s close of above 23,000, were expecting the momentum to continue and the same was reflected in the index opening gap up. However, the index lost steam as rumours of a possible rights offering in DG Khan Cement (DGKC -4.6%) triggered a sell-off in cements. Alongside, institutional activity also appeared to be muted possibly due to the monetary policy announcement tomorrow where some still expect a 50bps increase in the discount rate,” Rawjani continued.

“The market closed in the negative losing intraday gains as profit taking swept in ahead of tomorrow’s monetary policy statement. Though the consensus view remained on the central bank holding rates, caution was the flavour of the day,” said Adeel Jafri ,  adding that the banking sector ended in the green.



“The oil and gas sector was a major laggard as Pakistan Petroleum (-2.1%) and OGDC (-0.6%) slipped in line with global oil prices which declined on easing tensions in the Middle East. The cement sector was the second largest negative mover as Lucky Cement (-3.42%) and DGKC (-4.6%) closed weaker on concerns over the health of the pricing agreement after recent expansion plans announced by the latter.” Jafri added.

Trade volumes fell to 255 million shares compared with Wednesday’s tally of 265 million shares.

The value of shares traded during the day was Rs9.5 billion.

Pak Elektron Limited (PEL) was the volume leader with 18.8 million shares gaining Rs0.96 to finish at Rs7.88. It was followed by DG Khan Cement with 13.7 million shares losing Rs3.72 to close at Rs76.29 and Bank of Punjab with 13.6 million shares gaining Rs0.12 to close at Rs12.63.

Foreign institutional investors were net sellers of Rs331 million, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, September 13^th,  2013.

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