Pre-budget concerns shear 208 points from 100-index

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The Karachi Stock Exchange benchmark 100-share index witnessed correction with a decline of 208.22 points to 22,150.74 points on pre-budget concerns, dealers said.


Zafar Moti, analyst and senior member KSE, said the market saw correction and remained volatile throughout the day. “Institutional and foreign profit-taking was registered in the market amid the pre-budget concerns. Although there is no concrete information regarding new taxes in the federal budget due on Wednesday, investors were panicky in the market,” he said.


Analysts said the underlying theme of the market was cautious ahead of the federal budget, as traders tightened their positions and adopted wait and see policy.


The correction in the market was due for longtime, while frequent upwards had made small traders and retail clients worried – who were waiting for the market to come down at their purchase level.


The KSE-100 fell by 208.22 points, or 0.93 percent, to 22,150.74 points against 22,358.96 points recorded in the last session. The index at one time during the intraday session reached to a high level of 22,450.23 points, while the lowest level of the day was recorded at 22,099.36 points.


The KSE-30 also decreased by 186.63 points, or 1.07 percent, to 17,235.24 points in the session against 17,421.87 points earlier.


Trading was mostly recorded in the second- and third-tier stocks. Lotte Chemical, Bank of Punjab-Right, Pace (Pak) Ltd, and BankIslami Pakistan dominated the third-tier stocks and emerged as the volume leaders.


Of a total of 387 companies’ active in the session, 116 ended in green, 249 in red, while 22 were unchanged.


Along with the index, turnover, trading value and market capital also shrank. Turnover was sheared by 63 million shares to 277.03 million shares from 340.24 million shares, trading value shrank to Rs8.03 billion against Rs10.61 billion, while market capital was cut to Rs5.33 trillion against Rs5.39 trillion earlier.


Institutional and foreign selling was witnessed across the board and especially in blue chip stocks of oil and energy, banking sector and some communication stocks. MCB Bank Ltd, PTCL, Pakistan Petroleum Limited, Parco and Oil and Gas Development Company topped the list of the losing shares.


Ahsan Mehanti, an analyst at Arif Habib Corp, said the market underwent negative activity amid profit-taking by institutions and foreigners in economic uncertainty and security concerns in the city. “Volatility in international commodities subdues the foreign interest. Trade was limited to second- and third-tier stocks, while investors were direly waiting for the federal budget announcement,” he said.


Noorali Barkatali, an analyst at KASB Securities, said the index gave up most of its intraday gains. “Despite having gone high in the previous session, the index closed relatively on a weaker note,” he said.


Importantly, similar up and downs were also seen on charts of few key stocks too, Barkatali said. “This along with sale signals may also result in high volatility. Thus, this calls for carefulness and cautious stance. Be very selective and play with strict stop loss,” he advised.


VeerBhan Bajaj, an analyst at JS Global, said investors were on the sidelines on expectations of new budgetary taxation reforms in the upcoming budget FY2014.


“Selling pressure was witnessed in oil and gas sector except the PSO, which went up 1.6 percent, due to the government plan about issuance of term finance certificates to clear circular debt,” he said.


In the fertiliser sector, Dawood Hercules, ENGRO and FFC led the decline. Second-tier stocks turned out to be the volume leaders.


Highest increase was recorded in shares of Mitchell’s Fruit (by Rs23.66 to Rs496.95 per share and Abbott Lab (by Rs9.62 to Rs333.25 per share). Major decrease was registered in shares of Bata (Pak) (by Rs60 to Rs1,740 per share) and Pak Services (by Rs16.40 to Rs345 per share).


Significant turnover was recorded in stocks of BankIslami Pakistan, Pakistan International Airlines, Bank of Punjab (Right), TRG Pakistan Ltd, Fauji Cement, Bank of Punjab, Sui Northern Gas, Pakistan Telecommunication Company Limited, Jahangir Siddiqui Co and Pace (Pak) Ltd.


Total 24.79 million shares of BankIslami Pakistan were traded with a share value cut by 26 paisas to Rs6.75. PIA recorded trading of 23.35 million shares with decline of 33 paisas to Rs9.61 per share.


Bank of Punjab (Right) remained third leading stock with 15.92 million shares with decline of 72 paisas to Rs4.17 per share; TRG Pakistan Ltd (13.60 million shares with fall of four paisas to Rs11.58 per share); Fauji Cement (11.68 million shares with decrease of six paisas to Rs12.06 per share); Bank of Punjab (10.51 million shares with drop of 64 paisas to Rs14.07 per share); Sui Northern Gas (9.02 million shares with rise of Rs1.07 paisas to Rs22.59 per share); PTCL (8.69 million shares with decrease of 71 paisas to Rs21.81 per share); Jahangir Siddiqui Co (7.36 million shares down 46 paisas to Rs13.53 per share) and 6.57 million shares of Pace (Pak) Ltd were traded, recording 27 paisas slide to Rs5.07 per share.


Shares turnover in the futures market crashed to 13.50 million shares from 22.37 million shares traded in the previous session.


Lotte Chemical June futures led the market with 2.10 million shares with dive of 48 paisas to Rs8.49 per share, followed by PSO June futures with 1.98 million shares with improvement of Rs4.50 to Rs304.18 per share.


Out of 126 companies’ shares traded in the future market, seven recorded gains, 117 underwent lose, while two remained unchanged.

Courtesy:  The News

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