KSE rebounds after bailout fund launched: up 17.65 points

LAHORE - The first session of Karachi stock market was disappointing and bourse was losing over 100 points but after the government's institution intervention, shares rebounded from early losses to close up to 0.3 per cent.
The Karachi Stock Exchange's benchmark KSE-100 index while at the end of the session gaining 17.65 points close at 6059.09 remained within the limit of physiological barrier of 6,000 points. Otherwise, in the morning session this barrier had been breached. Volume remained at 165.311 million shares.
KSE-100 during morning trade session had lost 115 points when the state-owned National Investment Trust announced the formal launch of its State Enterprise Fund (NIT-SEF), which boosted market sentiment.
The entity, which is funded by state institutions and a consortium of banks, will invest rupees 20 billion ($250 million) in eight selected stocks and resell the shares to overseas Pakistanis in a bid to prop up the market.
After the colossal decrease in market capitalisation, the authorities of NIT started purchasing the ill-fated shares. The Chairman NIT Tariq Iqbal Khan has said that from today, the institution has started its function to purchase eight promised government scrips namely OGDC, PSO, PPL, SNGPL, Sui Southern, PTCL, National Bank and Kapco.
"We have formally launched the fund from today and started buying the selected stocks," he added.
"It will improve the liquidity situation on the market."
The market opened for the year having lost 37 percent of its value in just two weeks. On December 15, regulators had removed a "floor" imposed in August to stop heavy losses on the KSE-100.
Senior brokers and analysts are of the view that the fund would create positive sentiment and would help stabilising the market. However, it is too soon to say when foreign investors would return to the Karachi exchange.
Another broker said the market on the second day of the trading week opened positive with plus 6 points but when investors preferred to sale their holdings, the trend sent the market under pressure, which saw the benchmark KSE-100 index reeling down to the negative zone but soon a wave of optimism overtook the market, as some investors (government owned institutions) came from behind and went on purchasing in some sectors that not only rescued the market from initial sink but pushed the KSE index up. Though the analysts claimed that KSE dropped on Monday was not due to lack of investor confidence but of profit-taking proved to be wrong today as reality showed that only government intervention could save the bourse.
It is pertinent to note that foreign investors withdrew 440 million dollars of a total of 1.8 billion dollars in holdings from the KSE in 2008.
Due to attractive prices of sharp declined share, most of traders in share business trying all out to buy valued stocks as traders believe that the fund is to be launched soon. Not only traders but also common people knew that after shedding over 58 percent of its size last year, market shares are working purchasing.
Today, in KSE market 100 scrips recorded gain, 147 landed in the negative column and 10 scrips remained unchanged out of a total of 257 companies.
Meanwhile, the KSE-30 index also landed into positive column and gained 71.80 points wrapped up at 5810.81 points while KMI-30 index also gained 135.86 points closed at 7548.38 points.
On Tuesday at KSE, volumewise leader remained WorldCall Telecom shares.
On the other hand, Lahore Stock Exchange (LSE) also gained 33.69 points and wrapped up at 1666.15 points.
At KSE, WorldCall Telecom being a wolumewise leader gained its value of Re 0.56 closed at Rs 4.32 with volume of 26,885,500 shares followed by Oil and Gas Dev which also gained its value of Re 0.79 closed at Rs 53.28 with volume of 13,230,300 shares while TRG Pakistan also gained its value of Re 0.25 closed at Rs 2.76 with volume of 8,515,000 shares traded. Zeal Pak, PTCL and Pace (Pak) Ltd also gained their values of Re 0.04, Re 0.40 and Re 0.32 closed at Re 0.65, Rs 16.50 and Rs 9.47 with volumes of 7,783,000, 72,49,300 and 6,475,500 shares respectively. However, Fauji Bin Qasim Fert, Habib Bank Ltd and BankIslami Pakistan lost their values of Re 0.90, Rs 3.52 and Rs 0.27 closed at Rs 15.00, Rs 71.72 and Rs 7.01 with volumes of 5,769,000, 4,643,900 and 4,198,000 shares respectively. While Pak Petroleum Ltd, National Bank and Engro Chemicals scrips gained significant values at KSE.