Equities plummet

The KSE-100 share index fell by 403 points or 1.21 percent to 32,860.57 points Monday compared to 33,263.66 points Friday, weighed mainly by foreign selling. Consistent foreign selling, lack of immediate triggers and the consequent institutional profit-taking, the equity analysts believe, accounted for the day's fall and the trading turnover nose-dived to 100 million shares from previous 135 million.
The stocks traded also depreciated in value to five-week low of 5.4 billion or $55 million, 34 percent down from Rs 8.3 billion or $83 million of the previous session. Of the total 343 scrips traded, 103 went up, 218 went down while 22 stayed unchanged.
The benchmark index was seen hitting intraday high and low of 33,305.72 and 32,832.05 points, respectively. The market capitalisation inched down to Rs 7.401 trillion from Rs 7.477 trillion. Ahsan Mehanti of Arif Habib Corp attributed the negative note to thin trading activity on institutional profit-taking after a fall in global commodities.
Topline's Samar Iqbal, however, said despite the day's 1.2 percent fall, the market was up two percent in 2015 till date. Index heavyweights such as MCB and LUCK fell sharply by 3.1 and 2.9 percent. "MCB alone contributed 74 points to the index fall," she observed.
Ovais Ahsan of JS Research said consistent foreign selling and lack of immediate triggers induced the institutions to offload their positions. The week's first session saw foreign investors selling their net portfolios to the tune of $6.62 million. "Investors fear that with falling international markets foreigners would also sell in Pakistan," Samar said. Since January, the analyst recalled, offshore investors had been net sellers of $64 million. Unconfirmed news that regulators have issued notices to leading brokers and fund managers also forced investors to remain on the sidelines, she opined.
Jahangir Siddiqui Company appeared as a volume leader with 10.4 million of its listed stakes changing hands, each gaining 21 paisa to close at Rs 17.82 per share. Others to follow were K-Electric which traded by 8.7 million, TRG Pakistan 5.6 million, Faysal Bank 5.0 million, Pakistan International Bulk Terminal 4.7 million, Bank of Punjab 4.0 million, Pak Elektron 3.9 million, SSGC 2.9 million, Engro Foods 2.8 million and NBP 2.7 million shares.
Trading on the futures market was lacklustre at 12 million contracts compared to last week's 17.5 million. Mehanti said risk-averse investors were awaiting new auto policy, privatisation schedule for the State-Owned Enterprises (SOEs) and State Bank's policy rate announcement.
The banking sector, Ovais noted, lost ground on expectations that a potential cut in the policy rate on the back of lower-than-expected inflation would shrink banking spreads going forward. Investors' concerns on cement prices kept the sector in red zone after DG Khan Cement's announcement of expansion southward.
Some of the local mutual funds were sold on the back of redemptions by investors after a dismal performance by the market in the past few weeks. Some of the defensive plays like KAPCO, up 1.3 percent, which boasts of a dividend yield north of 10 percent attracted investor interest, Ovais said. K-Electric gained 2.1 percent on the material information disclosed by the utility company announcing the set-up of a 500MW plant in the upcoming Bahria Town project in the city's peripheral areas. Mehanti said weak global equities, limited foreign interest and consolidation in bluechip scrips post major earning announcements played a catalytic role in the day's bearish activity.