Dull activity on KSE

Another dull session was witnessed on the Karachi Stock Exchange during the last day of the week as the ready market volume shrank to 104 million shares against 189 million in the previous session. The KSE-100 index remained ranged bound throughout the day and finally closed almost breakeven at 10,563 points.
Cumulatively, the KSE-100 index gained 156 points during the week. On Thursday, BoP and POL remained volume leaders at 16 million and 10 million shares, respectively. BoP closed Re1 higher from its opening price while POL closed 0.1 percent lower from its intra-day high at Rs383.25.
Shehzad Chamdia Securities chief executive officer Ahsan Mehanti said rain in the city was the major factor behind sluggishness on the market as punters received a positive news overnight.
The KSE management lifted ban on short selling in the futures counter, which might propel share values in the coming week. Corporate results could trigger rally on the market, encouraging several entities to make fresh commitments. Hasnain Asghar Ali of Aziz Fidahuesin said the excitement regarding payout and earnings kept interest alive in oil and gas exploration stocks, particularly in POL that stayed the volume leader in the first session.
Desperate attempts were then made to spill the bull-run to other sectors as activity was witnessed in cement and banking sectors and the KSE-100 made an intra-day high of 10,599 (+43).
But the strategy failed, although activity allowed the T+3 turnover to hit the mark of 100 million; the index saw an adjustment toward the end and closed an inch above its previous closing.
Another surprise was the upper lock of Hubco. Although, the company has planned to expand its production capacity as advised by the Wapda and has healthy cash flows and sound dividend policy, the sudden interest is most likely linked with the introduction of KSE-30 index, which is based on free float. Thus, the index will be led by stocks, which are most liquid in terms of availability of float.
Hubco, therefore, re-emerges as a star. Technically, the index will continue to find support around 10410-10417 while overhead resistance stays at 10590-10596.
Although we have major announcements next week, the rollover from August-September might not allow the index an unrestricted surge despite positive surprise either in terms of earnings or payouts.