The Karachi share market on Friday opened on a positive note and the KSE-100 index hit 11,290.59 points intra-day high on the back of acceptance of amendments in Client Level Netting (CLN) regime by regulator.
However, the index could not sustain as the market players opted to offload their holdings in the second half of the session which pushed the index in the negative zone, hitting 11,105.36 points intra-day low before the KSE-100 index settled at 11,133.35 points, down 74.44 points.
The KSE-30 index shed 97.41 points to close at 14,010.48 points. The market witnessed dull trading activity as the ready market volume decreased to 115.098 million shares from 166.257 million share while the futures market turnover stood at 55.624 million shares against 63.884 million shares traded a day earlier. The overall market capitalisation decreased by Rs 20 billion to Rs 3.038 trillion.
Trading took place in 315 scrips, out of which 165 scrips closed in negative column and 112 scrips closed in positive column, while the value of 38 scrips remained unchanged. Lucky Cement was star performer with 10.958 million shares and gained Rs 0.30 to close at Rs 67.60. It was followed by NBP which gained Rs 0.10 to close at Rs 268.80 with a volume of 10.503 million shares. OGDC closed at Rs 118.00, down by Rs 0.85. Bank Al Falah and BoP closed at Rs 50.90 and Rs 119.00, down by Rs 0.20 and Rs 1.90 respectively while Picic gained Rs 0.55 to close at Rs 64.30.
In the other top ten volume leaders, D. G. Khan Cement closed at Rs 83.50, down by Rs 1.05, Fauji Fertiliser Bin Qasim closed at Rs 30.35, down by Rs 0.05, Pace (Pak) Ltd closed at Rs 23.65, down by Rs 1.20. However, Hub Power gained Rs 0.40 to close at Rs 32.40.
Wyeth Pak and Bata (Pak) were the highest gainers with Rs 39.00 and Rs 7.95 to close at Rs 1849.00 and Rs 167.55 respectively. Nestle Pakistan and Treet Corp were the highest losers, which closed at Rs 1500.00 and Rs 205.00, down by Rs 33.00 and Rs 7.00 respectively.
Ahsan Mehanti, CEO of Shehzad Chamdia Securities, said that the main reasons for negative close were that investors were waiting for the outcome of CLN, majority of December results announced, and market being in the consolidation zone. CFS value decreased by 0.22 percent to Rs 49.04 billion as compared with Thursday's value of Rs 49.20 billion, with five highest CFS scrips being NBP, OGDC, PPL, POL and BoP.
Hasnain Asghar Ali at Aziz Fidahusein Securities said that acceptance of the proposed amendments in the Client Level Netting regime by the regulator gave a sigh of relief to the market participants. Value buying in the selected stocks, therefore, allowed the index an initial high of 11290, 83 points. Low volumes, however, stayed the point of concern as it had a trickle-down effect. Absence of aggressive buyers was, therefore, felt as the off-loading from the CFS holdings was offered no resistance and the KSE-100 index was pushed to make an intra-day low of 11,105.36--103 points lower.
The proposed amendments will certainly improve liquidity, if institutional margin is waived or deposited directly (which is not in practice at the moment). It will improve brokers' liquidity, thus enabling them to further expand. The market players, however, opted to wait for practical implementation of the amendments, and that of CLN.
With the market participants sitting with the spectators, the low turnover failed to tempt the liquid buyers, and the index closed negative after a mild recovery. Technically, the index will continue to find support around 10970-10977 while immediate resistance stays at 11,290-11,296. Placement on dips is, however, recommended in the stocks having promising earnings and carry growth stories. Inflow of CFS holdings most likely due to low turnover in the upcoming dry sessions will, however, discourage trading activities.
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