KARACHI – Investors were unmoved by the government’s decision to dissolve the cabinet and induct better quality personals. In addition, the result season could not instill momentum as the market sentiment stayed apathetic. Political uncertainty and disturbed US-PAK diplomatic ties dented investor confidence.
Regional insecurities have triggered absence of foreign investor participation in the last few days. The KSE-100 index dwindled a significant 111.81 points to close at 12187.47 points, while the total volume and the total value stood at 47,558,852 and 2,431,497,349 respectively. The KSE-30 index shed 148.46 points to close at 11781.93 levels, while the all share index lost 72.64 points to close at 8550.12 points.
Matured levels of various main board stocks continued to struggle for sustenance primarily due to absence of buyers. The post results sell-off certainly triggered low volume price erosion and disallowed adventure by resident participants – mainly in high priced stocks struggling to justify prevailing levels. Adding to the pressure was fresh corporate float, wherein some were minimising losses, while others addressed redemption calls.
However, stocks offering consistent dividend yields and companies who continue to report growth despite economic downturn continued to invite renewed buying interest, while low volume gains in illiquid and expensive stocks minimised losses in the benchmark. Volatile regional situation, tough diplomatic ties with US and gloomy economic and financial matters have restricted local participants including resident participants, holding companies and financial positions from resisting the declining trend at the local bourse.
Since the FIPI updates have large quantums of activity by expatriates and local financial groups activity executed through foreign brokerage houses; regional strategy of sell from emerging to developed market might not be followed at local equity markets. The prolonged stagnation and extended decline might force off-shore participants to bow to the sentiment, thus keeping chances of price erosion in the frontline stocks intact, said Hasnain Asghar Ali at Aziz Fidahusein.
He added that short covering on technical calls, update on leverage product may, however, provide an opportunity of reducing exposure in high priced stocks, while funds dedicated for equity markets can be placed in stocks with high dividend yields.
