With the port city ravaged by ethnic violence and global markets buckling to reports predicting another recession, the local bourse took a 200 plus points pounding as the KSE-100 index closed at 10,879 points. Following the international markets, Pakistan’s market too opened in red zone with selling witnessed in key stocks in Banking, Oil and Fertilisers.
The Oil sector in particular did not help the index as OGDC and PPL were responsible for loss of 111 points in the index. Even positive showing by HBL in its 1HCY11 results failed to ignite a spark in the depressed market. “With no end to the violence plaguing the city in sight, we don’t expect a silver lining to grace this market any time soon and advise a side line stance to investors”, said Ali Hussain, Senior Investment Analyst at HMFS.
Volumes throughout the week remained dull as only 41 million shares were traded with LOTPTA, FATIMA and JSCL being the volume leaders. Blue chips such as ENGRO and NBP closed on their lower circuit breakers. HBL also announced its 1H2011 earnings of Rs8.43 per share, although the result was in line with market expectations, the stock followed the broader market trend and closed at Rs116.43 per share, down 1.6 per cent from last close.
Fast losing value of local currency against international currency, besides depicting shift of interest from local to foreign currency, has been an add-on for quite sometime, as the fast losing value of the local currency aggravated the sell-off.
The KSE 30 index lost 267.41 points to close at 10,351.41 levels, while All Share index closed at 7,571.75 levels after losing 164.20 points. Total 38 scrips advanced 156 declined and 86 remained unchanged out of total 280 scrips traded.
Local strength has been curtailed due to recently adopted mechanism for CGT and it is likely to force further adjustment in benchmark. Stocks suffering due to declining local demand, increasing input cost, gas curtailment and high debt portfolio might however stay under pressure.
Hasnain Asghar Ali at Aziz Fidahusein said that technical recovery on syndicated effort might however provide opportunities for sell-off, while adjustment in dividend yielding stocks away from the above mentioned factors can become part of both trading and investment portfolios. Various public sector companies wherein assets mismanagement is likely to lead to further decline in earnings while higher exploration charges and increase in unsuccessful drilling is likely to lead to downward revision in fair values of various government owned entities, thus indicating further pressure, he added.
Karachi Stock Exchange falls below 11,000 mark
