Investors’ disinterest persists despite end of cricket fever

KARACHI – The KSE-100 index, on Thursday, closed at 11,809.54 points marked by a gain of 0.93 points, while total volume and total value stood at 55,378,100 and 3,594,159,574 respectively. The KSE-30 index accumulated 18.63 points to close at 11561.50 levels, while All Share index closed at 8,276.78 levels after losing 0.17 points. End of the cricket fever failed to instill investor’s interest. The index return in the concluded first quarter of the CY11 remained below par, at -1.77 percent, triggered by a negative return in February. The following half track recovery in March reduced dented return in the quarter.
The quarterly result season is expected to commence shortly, which may lead to recovery in the benchmark stocks. The top ten stocks have been largely tilted towards the red zone except urea stocks including Engro and FFC. A few banks, including HBL and MCB, stayed active. We believe that fundamentally sound stocks, available at a discount, may be considered as a buying target for the upcoming quarter, said Bilal Asif at HMFS. Sentiments of market participants were dented from the mega defeat. However, availability of various large cap and dividend yielding stocks in MTS allowed the momentum to stay positive, wherein chemical and fertiliser sector stocks led the way.
Various high priced stocks, which are now being considered expensive due to an absence of follow-up support, barely managed to stay in the green zone. Although, post introduction of MTS turnover has shifted from low priced and below par stocks to various main board and mid-tier stocks, CGT; reducing the number of participants, along with a reduction in volumetric support by financial groups, is certainly disallowing the local bourse to perform at its potential.
Economic and financial woes will have social and political repercussions.
The latest threat is the much anticipated rise in petroleum prices since the government is unlikely to bear the increase in international prices by reducing PDL and off-setting the difference by reducing non-development expenses. Therefore, opting for large cap stocks offering consistent dividend yields yet available at cheaper multiples for both trading and placement, is recommended, said Hasnain Asghar Ali at Aziz Fidahusein.