Stocks end down as investors book profits

KARACHI: Stocks failed to sustain overnight positive momentum on Wednesday as investors opted to book profits at inflated levels amid worries over delay of the next IMF tranche.

The Karachi Stock Exchange’s benchmark 100-share index ended 0.6 per cent or 64.22 points lower at 10,617.65.

Investors are awaiting the outcome of meetings with the International Monetary Fund (IMF), which discusses release of the sixth tranche of an $11.3 billion emergency loan agreed in November 2008. Policy-level meetings continued on Wednesday.

Investors also withdrew from the market on fears that higher monthly inflation will possibly lead to another discount rate hike by the central bank in the next monetary policy statement, said Elixir Securities equity dealer Faisal Bilwani. The next policy statement is expected at the end of this month.

Major losers include Oil and Gas Development Company (OGDC) and Pakistan State Oil (PSO) on profit booking after Tuesday’s gains on tax relief. The finance ministry announced the reversal of the turnover tax rate to 0.5 per cent. In the fiscal budget 2010-11, the government had increased the rate from 0.5 per cent to 1 per cent.

PSO, which stole the show on Tuesday, received massive battering closing down 1.5 per cent while Attock Petroleum Limited ended down 2.1 per cent.

Among exploration and production companies’ stocks, Pakistan Petroleum Limited and OGDC bore the brunt of selling pressure despite market talk of purchases by foreign funds. OGDC was down 0.57 per cent at Rs154.07 and PPL fell 1.57 per cent to Rs185.85.

Volume was 106.16 million shares compared with 108.16 million shares traded on Tuesday.

DG Khan Cement was the volume leader with 9.59 million shares on the back of talk that foreigners were sellers of the scrip. The stock price declined Rs0.95 to finish at Rs26.77.

It was followed by Lotte Pakistan PTA with 8.88 million shares falling Rs0.07 to close at Rs10.27 and Bank of Punjab with 8.37 million shares gaining Rs0.28 to close at Rs9.71.

Published in The Express Tribune, November 4^th, 2010.