Market watch: Index stays in red awaiting monetary policy announcement

Benchmark KSE-100 index falls 32.09 points.

KARACHI: Index traded mixed, settling lower as investors opted to remain on the sidelines before the monetary policy announcement due on Saturday.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.12% or 32.09 points to end at 27,083.12.

“Financials to the likes of MCB Bank (MCB PA -0.16%), National Bank (NBP PA -0.74%) and Bank Al Habib (BAHL PA -0.8%) traded under pressure since the opening bell, with talks of 50bps benchmark rate cut a possibility after the 10-year PIB yields shrank by 60bps,” said Jawad Aboobakar from Elixir Securities.



“While the index spent most of the day in the negative territory, cements remained buoyant, with DG Khan Cement (DGKC PA +2.1%) leading, while investor interest was witnessed in Pakistan Oilfields (POL PA +0.76%) on reported local buying.

“On the other hand, fertiliser sector remained under selling pressure with Fauji Fertilizer (PA +0.04%) closing flat and Engro Corporation (Engro PA -2.25%) down despite no positive confirmation of the rumour of a temporary plant shutdown of its listed urea subsidiary Engro Fertilizer (EFERT PA -1.3%).

“We advise investors to take advantage of weakness in value plays and recommend building positions particularly in BAFL, NML, UBL, PPL, PSO, OGDC, POL and NCPL,” concluded Aboobakar.

Meanwhile, Khalil Usmani of JS Global said that volumes remained on the higher side with third-tier stocks taking the lead.

“K-Electric became the volume leader after the material information announced K-Electric setting up Pakistan’s first ever 660 MW Green Field Coal-Fired Plant with Harbin Electric International, China,” said Usmani.

“We recommend investors to remain positive ahead of the monetary policy as speculators are expecting a rate cut (our official call for upcoming MPS is unchanged) considering the rupee appreciation and lower inflation,” he suggested.



Trade volumes slightly fell to 284 million shares compared to Wednesday’s tally of 313 million. Shares of 370 companies were traded on Thursday. At the end of the day, 186 stocks closed higher, 171 declined and 13 remained unchanged. The value of shares traded during the day was Rs9.2 billion.

K-Electric was the volume leader with 37.4 million shares, gaining Rs0.51 to finish at Rs6.72. It was followed by Jahangir Siddiqui and Company with 20.1 million shares, gaining Rs0.79 to close at Rs11.48 and Byco Petroleum with 16.2 million shares, gaining Rs0.40 to close at Rs12.49.

Foreign institutional investors were net sellers of Rs410 million worth of shares, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, March 14^th, 2014.

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