KSE sheds 84 points amid political uncertainty

KARACHI - The market witnessed bearish trend on Monday and the KSE 100-index shed 84 points and closed at 9221 points.
The 100-index opened in red zone with a loss of 1.26 points and closed at 9221.96 with a loss of 84.40 points at the end of the day.
The KSE 30-index closed at 9741.21 with a loss of 84.69 points, while KMI-30 index closed at 13474.72 after losing 102.87 points. All shares index closed at 6533.68 with a loss of 60.25 points.
Trading activity was minimal as compared to the last trading session as the ready market volume stood at 76.070 million as compared to last trading session’s 140.320 million. Future market volume however stood at 1.911 million shares as compared to 2.428 million shares of last trading session.
Market capitalization was over Rs2.661tr. Total trades decreased to 60,994 as compared to last trading session’s 91,516.
As many as 96 companies advanced, 260 declined and 16 remained unchanged. Highest volumes were witnessed in BAFL at 15.460 million closed at Rs14.12 with a loss of 0.15 followed by NCL at 5.070mn closed at Rs16.70 with a gain of 0.50, PPTA at 4.235mn closed at Rs7.45 with a loss of Rs0.17.
Ahsan Mehanti at Shehzad Chamdia Securities said, “Bearish trend was due to political uncertainty rise on the back of NRO lapse this week. Uncertainty over the monetary policy review, fall in international oil prices and investors’ concerns over circular debt issue affecting oil refineries cash flows played a catalyst role in prevailing negative sentiment.”
Hasnain Asghar Ali at Aziz Fidahusein said, “Shallow market continued to face off-loading mainly in the main board stocks having reservations on revenue and payout streams by the local participants, as depleting turnover forced an early sell-off. Although inflow in index heavy weights during previous week did allow the index to maintain positive stance, amid low volumes, absence of support by the off-shore participants forced the float accumulated on anticipation of foreign support started making its way in the main stream, after an initial stagnation. Absence of buyers on intervals forced low volume price erosion in the expensive stocks, and the benchmark went tumbling down and registered triple digit adjustment in early hours. Resistance offered by index heavy weights, mainly government sector companies hovering in deep reds did stage recovery in closing hours, and momentum duly invited short covering, thus, allowing the index to regain some losses incurred during the session. While low price stocks, due to their unvalued stance and likelihood of onetime capital gains due to development regarding sale of their strategic holdings and stocks available at comparatively low multiples continued to invite accumulation by the retail and corporate participants. Thereby, allowing the turnover to keep ticking. Unavailability of ready board leverage however disallowed change in the approach of short-term profit taking that continued even on mild recovery. Absence of user friendly ready board leverage have indeed made the local bourses more sensitive to various political and law and order issues, which otherwise would not have impacted the market movement as the outcome from both fronts cannot be ascertained from the coffee shop debates. While economic concerns, such as high government borrowing, growing liabilities’ ($ 55 billion), reservations regarding achieving revenue and export targets and likely rising trend in inflationary pressures likely to disallow declining trend in local interest rates (if the conservative monetary stance continues), to continue. Even if upcoming monetary policy witnesses the realistic decline of 25-50 bps, absence of triggers and follow-up support have certainly restricted active participation in the local equities, at prevailing levels.”