Market watch: Investors remain on sidelines, index ends in red

Benchmark KSE-100 index falls 90.28 points

KARACHI: Moody’s Investors Service report on Pakistan’s debt affordability and a drop in the price of international crude were enough to push the index in the red, as investors remained looking for positive triggers.

Speculation over the interest rate cut and reports of another mini-budget in the offing pushed investors in a corner.

At close on Monday, the Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 0.26% or 90.28 points to end at 34,336.47.

JS Global analyst Ahmed Saeed Khan said volatility prevailed in Monday’s session as the index juggled between -116 and +33 points. “After a 3% fall in the value of international crude oil prices, the exploration and production (E&P) sector as a whole remained depressed,” said Khan.



“Major laggards of the sector were Attock Petroleum (APL -1.5%) and Pakistan State Oil (PSO -1.2%).

“Pressure also remained on the cement sector where only Cherat Cement (CHCC) and Power Cement closed marginally positive. News of redirection of gas from the fertiliser sector also kept the sector under pressure. Moving forward, the market is expected to remain in the current state in the absence of any positive trigger.”

Meanwhile, Elixir Securities report stated the market witnessed lacklustre trading on a day that was originally scheduled to be a holiday.

“Stocks opened lower after weekend comments by IMF and Moody’s on country’s debt burden while declines on benchmark in early trade were led by oils after latest sharp drop in crude.



“Investors, primarily institutions, stayed on sidelines in absence of major triggers with most sectors ending in red. Contrary to market direction, power producers closed higher as investors betted on rupee devaluation that benefits Independent Power Producers (IPPs) due to their dollar-linked revenues.

“Most activity was seen in small and mid-caps on retail driven activity with Sui Southern Gas (SSGC +4.09%) dominating the volumes charts, trading most in over five years.

“It is expected that market will trade in a narrow range with institutions tracking flows and likely awaiting monetary policy, however, volumes may remain unusual as investors remain split over possibility of a rate cut.”

Trade volumes fell to 220 million shares compared with Friday’s tally of 303 million shares.

Shares of 351 companies were traded on Monday. At the end of the day, 107 stocks closed higher, 218 declined while 26 remained unchanged. The value of shares traded during the day was Rs8.1 billion.

SSGC was the volume leader with 30.8 million shares, losing Rs1.63 to finish at Rs41.45. It was followed by K-Electric with 26.6 million shares, gaining Rs0.10 to close at Rs8.02 and Descon Oxychem (R) with 22.8 million shares, gaining Rs0.41 to close at Rs1.26.

Foreign institutional investors were net sellers of Rs53 million during the trade session, according to data maintained by the National Clearing Company of Pakistan Limited.

Published in The Express Tribune, November 10^th, 2015.

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