KARACHI – Off-shore selling and local groups continue to engage in heavy selling and kept the local bourse under pressure and low volume price erosion in the high priced stocks thereby prevented resistance even by the local corporate participants besides inviting panic selling.
The KSE 100 index closed at 11,375.14 with a loss of 231.47 points, while total volume stood at 47,640,089 along with the total value of 2,866,412,875. The KSE 30 index closed at 11085.52 levels with the loss of 217.49 points, and All Share index lost 151.17 points to close at 8,082.05. A total of 68 scrips advanced, 171 declined and 90 were unchanged out of a total of 329 scrips.
However, group support in certain high priced stocks, snap rallies and volumetric activity in low priced stocks did allow resident participants minor trading opportunities along with various instances of short covering in front line stocks. Low volumes certainly panicked foreign sellers thus forcing offers at market rates, thereby forcing a meltdown during the closing hour.
Although, there may be various excuses of the recent and unprecedented decline at the local equity market such as gloomy economic and financial situation, recent cosmetic steps might however improve the situation for short period. The volatile security situation and unrest in Arab countries have continued to dog the bourse, mainly due to inflow from foreign investors.
Fund evacuation now, most probably by the local participants operating through foreign brokerage houses have seemingly created a vacuum thereby keeping the local equities in search of bottom to consolidate, low strength and alarming sensitive indicators might therefore keep high priced stocks under pressure.
High dividend yielding stocks have, and are likely to continue to invite support by the equity specific funds both from retail and corporate circuits, since the options are limited wider companies are likely to struggle, sell, therefore stays the call in the stocks trading at high multiples and offering low returns faced with high risk of capital loss.
Due to increasing input cost and declining local and international sale, high and expensive debt burden in some cases, while in some reserves have been wiped off or have been transferred to receivables due to inefficient management, being selective is therefore recommended, said Hasnain Asghar Ali at Aziz Fidahusein.
