KARACHI – The bourse exhibited volatile behavior as price of OGDC varied from a high of Rs 185 per share to a low of Rs 176 per share. This was largely due to the OGDC index weight of around 25 percent.
The KSE 100 index closed at 12306.70 points with a loss of 82.34 points, while total volume stood at 101,759,147 along with total values of 6,729,880,875. The market, justifiably, is expected to slide down on the back of profit booking following a marvelous run.
Silk bank’s active participation in the market backed by rumors of takeover or merger with BAFL kept the stock in the limelight. Commencement of new fertiliser plant of Engro as the stock crossed over the Rs 200 per share mark. Defensive stocks including HUBC and Kapco played a crucial role in protecting the index performance. Off-loading by prominent participants, that have been accumulators during uncertainty, forced the index to adjust almost two percent from intraday high attained during early trades, while color of panic in the closing hours forced the index deep in the red zone.
Technical adjustment, mainly in heavily weighed oil and gas exploration stocks by the corporate participants did restrict the index upside in various main board stocks. However, renewed buying on dips, restricted stocks from entering the red zone since nervous sideliners anxiously took fresh positions even in oil and gas exploration stocks. Dividend yielding and relatively safer stocks stayed the top picks of the liquid participants. Although economic woes persist, materialisation of the new and aggressive approach that is only on papers at the moment by the government ensures resolution of major issues on economic and financial front.
As the stance of administrative and nonproductive expenses reduction only can lead to major reduction of pressures on fiscal front along with various options available, those can address the unprecedented rise in inflationary pressures, thus halting the rising trend in local interest rates.
Absence of leverage may lead to low volume price erosion along with further ballooning of power crisis due to gas supply shortfall will certainly be a nightmare for manufacturing concerns, mainly those suffering from high, expensive and inefficient debt, and those facing tough time due to declining local and export sales. Government’s plan to address various economic, financial issues and public announcement of implementation of ready board leverage product along with its properties might however turnout as an opportunity for the liquid participants, said Hasnain Asghar Ali at Aziz Fidahusein.
