KARACHI – The rising diplomatic temperature with US, in addition to the deteriorating economic and financial situation, spurred jittery investors’ behavior and kept the index under pressure. News of an early MTS implementation failed to ignite buoyancy amidst a dearth of triggers. Investors chose to remain cautious, as average trading volumes dwindled to 94 million shares.
The KSE index suffered a loss of 66.05 points and closed at 12361.31 points. LOTPTA led the volume leader’s board as Sui twins SNGP and SSGC were amongst the toppers. Profit taking was seen as OGDC, MCB and PPL contributed the most to the faltering index. Inflation, for the month of January 2011, stood at 14.19 percent, lower than expectation albeit on the higher side.
However, various dividend-yielding stocks did invite cautious accumulation, but absence of buyers on intervals in high priced stocks made identifying bottom a tough task. Dampened activity by financial groups from both local and off-shore accounts, seemingly left the market with no choice but to sell, thus keeping the red numbers visible.
Despite assurance from authorities, the market-men awaited product dispatch by the Law ministry, which has withheld the product for long. Sensitive regulation of the product will be the priority for market men, incase further stringent regulations are introduced. It is feared that the product might go or forced to go dormant, as has been the case in various products introduced recently.
Positive impact of the government’s decision to sacrifice revenues in shape of reducing PDL and maintaining status quo in domestic fuel prices, making price control effective, did have a positive impact on monthly inflation numbers, thereby making a case for a lenient view in MP review next month.
However, reduction in expenditure to minimise impact on fiscal is yet to be executed, thereby keeping economy and financial issues in a highly fragile state.
Timely introduction of flexible leverage and reduction of diplomatic tensions is therefore expected to invite aggressive accumulation, said Hasnain Asghar Ali at Aziz FidaHusein.
