Market watch: KSE slides on first trading day of the year

KSE-100 index sheds 173 points to close below the 12,000 mark after the end of trade on Monday.

KARACHI: The local bourse welcomed the new year with anxiety after Sunday’s decision of key coalition partner, the Muttahida Qaumi Movement (MQM), to withdraw support from the government and sit on the opposition benches.

The benchmark 100-share index at the Karachi Stock Exchange (KSE) shed 173 points, or 1.44 per cent, to close below the 12,000 mark at 11,849.46 points after end of trade on Monday.

“It seems for the next few days politics will rule sentiments at local bourses,” commented Samar Iqbal, a local equity dealer. The MQM cited increasing petroleum prices and the deteriorating law and order situation behind the decision to break away from the government.

Almost all major oil, banking and fertiliser stocks bore the brunt of the selling pressure, added Jawad Khan from JS Global Capital. The index, however, recovered almost 90 points from its intraday low. “Some institutional support on lower levels helped the KSE-100 index close above 11,800 points,” added Iqbal.

The number of shares traded fell to 91.2 million shares – down almost 25 per cent from the average daily volumes witnessed during 2010.

Shares of 379 companies were traded on Monday. At the end of the day, 70 stocks closed higher, 291 declined and 18 remained unchanged. The value of shares traded during the day was recorded at Rs4.3 billion.

Lotte Pakistan PTA (LOTPTA) led the market with 11.55 million shares traded. The scrip lost Rs0.27 to close at Rs13.43 per share.

National Bank of Pakistan (NBP) followed with 7.4 million shares exchanging hands. The bank’s stock weakened more than three per cent to end the day’s trade at Rs74.08 per share. “NBP led the volumes chart along with LOTPTA, with the former seeing buying interest from state funds on lows,” explained Nazim Abdul Muttalib from Elixir Securities. Karachi Electric Supply Company (KESC) came in third, gaining Rs0.15 per share.

What to expect in January

On average, the market has offered a 5.7 per cent return in the first month of the calendar year over the last 15 years (1996–2010), according to a research report compiled by JS Global Capital. The highest return was witnessed in January 2002, when the market gained 27.3 per cent, whereas January 2009 saw the steepest fall of 8.3 per cent, post lifting of the price floor in December 2008.

Published in The Express Tribune, January 4^th, 2011.