Market watch: Share prices see-saw ahead of monetary policy announcement

Benchmark KSE-100 index falls 120.38 points.

KARACHI: The stock market remained volatile on Friday and juggled between the red and green signs. Investors exercised caution ahead of the monetary policy announcement on Saturday and booked profits in the last trading hour.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index closed lower 0.35% or 120.38 points at 34,026.59.

“Overall low volumes dominated the charts with select interest in Engro Corporation (+3.10%), which continued to trade near its upper lock on foreign buying,” said Sibtain Mustafa of Elixir Securities.

While Pakistan State Oil (+0.21%) continued to hold existing levels as the government announced that it would ensure payment of Rs40 billion on an immediate basis to reduce the energy sector’s debt.



“On the contrary, cement shares traded mixed as rumours of a price reduction of Rs25-40 per 50kg bag kept interest on the lower side,” Mustafa said.

“On Monday, the rollover week of futures counter will start, which will likely put pressure, however, any cut of more than 50 basis points in the policy rate will mitigate selling pressures, if any.”

JS Global analyst Arhum Ghous said in the oil and gas sector, Pakistan Oilfield Limited was down 2.2% on talk of discovery of dry wells while the cement sector recorded profit-taking.

K-Electric Limited (4.8%) remained under pressure due to lapse of a dividend proposal. International Industries rose 2.1% due to the announcement of outstanding quarterly results with EPS of Rs1.69 against Rs0.93 in the last quarter of 2014.

“Moving forward, we expect a bull run in the market, if a 100bps cut in the discount rate is announced, investors should target highly leveraged companies,” Ghous said.

Trade volumes fell to 227 million shares compared to 307 million on Thursday.

Shares of 369 companies were traded on the last trading session of the week. Of these, 212 declined, 139 closed higher and 18 remained unchanged. The value of shares traded during the day was Rs13.6 billion.



Pak Elektron was the volume leader with 20.3 million shares, gaining Rs0.58 to close at Rs48.74. It was followed by Jahangir Siddiqui and Company with 13 million shares, losing Rs0.11 to close at Rs17.86 and K-Electric with 11 million shares, losing Rs0.46 to close at Rs9.14.

Foreign institutional investors were net sellers of Rs427 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, January 24^th,  2015.

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