KSE-100 index down by 116 points on profit-taking

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The Karachi Stock Exchange benchmark 100 index declined by 116.25 points on Thursday to 21,342.65 points on profit-taking, dealers said. The decline came after several positive sessions.



Zafar Moti, an analyst and senior member of the KSE, said the market remained volatile throughout the day and traders remained puzzled by its movement. “Finally it ended with some profit-taking by foreign funds and institutes. Pressure mounted on the market and investors could not understand the market,” he said.


Moti said it was a little correction which was expected before the 21,000-mark level is reached.


The KSE-100 index fell by 116.25 points, or 0.54 percent, to 21,342.65 points, against the 21,458.90 points recorded in the last session. At one time during the intraday session the index reached the high level of 21,621.82 points. The lowest level of the day was recorded at 21,306.23 points.


KSE-30 index also dropped by 98.36 points or 0.59 percent to 16,588.64 points in the session against 16,687.00 points recorded in the last session.


Profit-taking was mostly recorded across the board. Of a total of 388 companies’ stocks traded, 122 advanced, 238 declined and 28 remained unchanged.


Along with the index, turnover and market capital declined, while trading value increased slightly in the session. Turnover fell by 100 million shares to 472.97 million shares, from 572.42 million shares, but it improved to a 43-month high Rs17.98 billion against Rs15.31 billion. Market capital declined to Rs5.16 trillion against the Rs5.21 trillion recorded in the last session.


Profit-taking was witnessed in the energy and banking sectors, where Oil and Gas Development Company, Pakistan Petroleum Limited, Pakistan State Oil, MCB Bank Limited and United Bank Limited experienced selling pressure. Engro Corporation performed well and major activity was seen in cement sector.


Most cement companies posted a decline (DG Khan Cement down 2.7 percent, Maple Leaf Cement down 2.6 percent, LUCKY down 1.8 percent). The decline followed news that the new tax measures likely to be introduced in the mini-budget may reduce annualised earnings by 3 to 4 percent. Similarly, the textile sector saw profit taking at the anticipation of a high turnover tax.


Samar Iqbal, senior manager of equity sales at Topline Securities (Pvt) Ltd, said that after a volatile session the market came down marginally in line with the bearish trend in the global markets. “Profit-taking was seen in big stocks including OGDC, PPL, PTCL and MCB. However, fertiliser stocks performed well due to institutional buying. Volume again remained above average,” she said.


Ahsan Mehanti, an analyst at Arif Habib Corp, said there were speculations in the market that some new taxes will be introduced in upcoming budget and investors reacted with concern, and this resulted in the decline of the market. “Some institutional profit-taking was also witnessed. Investors are also concerned as to when the government will go to the IMF, either before the budget or after it, and how it will resolve the circular-debt issue,” he said. “The Chinese Prime Minister’s visit also remained meaningless as he went away without any major breakthrough between the two countries.”


Fahad Ali, an analyst at JS Global, said that after three consecutive positive sessions in which the KSE-100 index rose by 4.4 percent, the participants witnessed a decline at the bourse. “After opening positive, the market fluctuated between green and red throughout the day, closing 116 points down. Initial pressure started from the oil sector where it managed to trickle down to banking, cement and textile sectors,” he said. According to one analyst at Sherman Securities the KSE-100 index closed down on profit-taking, as investors’ feared imposition of new taxes in mini-budget (likely to approve soon) that would slightly affect few listed companies. OGDC and PPL, which remained in limelight in last few days owing to foreign buying remained in red today (down by 1.5 percent and 2.3 percent respectively).


Ahmed Hanif, an analysts at KASB Research said few stocks which drove the index level to new highs were gradually losing lustre. This was evident from their intraday behaviour as those stocks failed to hold intraday highs, particularly OGDC. “Thus, we reiterate our stance of focusing on select stocks only, avoid chasing price action,” he said.


Highest increase was recorded in the shares of Unilever Foods, which rose by Rs240.00 to Rs5,040.00 per share, followed by Island Textiles, which improved by Rs29.98 to Rs729.99 per share. Major decline was noted in the shares of Nestle Pak, which fell by Rs200.00 to Rs6,500.00 per share, followed by Bata (Pak), which declined by Rs95.00 to Rs1,805.00 per share.


Significant turnover was recorded in stocks of Dewan Cement, Fauji Cement, TRG Pakistan Ltd, Lotte Chemical, Maple Leaf Cement, Karachi Electric Supply Company, Pakgen Powerx XD, Engro Corporation, Jahangir Siddiqui Co and Pakistan Telecommunication Company Limited.


Dewan Cement, with 49.47 million shares, remained the volume leader, with an increase of 74 paisas to Rs7.86 per share. It was followed by Fauji Cement with 27.12 million shares with a decline of 36 paisas to Rs11.70 per share.


TRG Pakistan Limited remained the third leading stock, with 21.04 million shares with decline of six paisas to Rs10.30 per share. Lotte Chemicals, 20.75 million shares, with a decline of 32 paisas to Rs8.31 per share; Maple Leaf Cement, 19.22 million shares, with a decline of 56 paisas to Rs21.31 per share; KESC, 17.67 million shares, with decline of 20 paisas to Rs6.72 per share; Pakgen Powerx XD, 17.60 million shares, with an increase of Rs1.02 to Rs25.82 per share; Engro Corporation, 16.80 million shares, with an increase of Rs7.01 to Rs148.55 per share; Jahangir Siddiqui Co, 16.76 million shares, with no change at Rs12.44 per share; and PTCL, 13.88 million shares, with a decline of eight paisas to Rs20.97 per share.


Shares turnover in the futures market increased to 30.99 million shares, from 26.91 million shares traded in the previous session. Engro May futures led the market with 6.32 million shares with an increase of Rs7.01 to Rs149.03 per share, followed by PSO May with 4.52 million shares with a decline of Rs1.19 to Rs281.62 per share. Out of 131 companies’ shares traded in the futures market, 33 recorded gains, 96 declined and two remained unchanged.

Courtesy:  The News


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