KSE falls 393 points as political disputes linger

Posted: August 21, 2008 in Financial
Tags: ,

The lingering on of some political disputes between leading coalition partners in government in post-Musharraf era and a little progress by them on fixing the disordered economy revived bearish sentiments at stocks market on Wednesday.

KSE 100-share Index plummeted 393 points or 3.60 per cent and finished at 10,526 points. The parallel running junior 30-Index lost 455 points or 3.61 per cent and concluded at 12,151 points.

The leading bank, energy and telecom stocks faced mounted selling pressure throughout session, while the fertilizer and cement stocks were also among those, which hit lower circuit breaker in this session. Over three dozen stocks closed at maximum possible low in a day.

Turnover in ready market fell by 45 per cent to 116.579 million shares as compared to 211.244 million shares changed hands a day earlier. Future market turnover also declined to 15.651 million shares against 23.704 million recorded yesterday.

Accordingly, the overall market capitalisation dropped by Rs118 billion to Rs3.268 trillion.

Analysts were of the view that the setting of modalities and prioritising the issues on government hand, as to which one should be addressed first made the sentimental investors worry about their investment on bourses and they indulged into profit-selling at the available margins.

The difference of opinion on political issues and widening differences between them (coalition partners) as to how and when the deposed judges should be reinstated; whether the trial of Musharraf should be held or indemnify him; and who would be the next president of Pakistan were some so disturbing issues. The lingering-on of these issues was again putting a big question mark on relationship between partners in government and growing uncertainty in markets too, said Farhan Rizvi at JS Research.

On the other hand the extremely disturbed economy needs immediate attention of the government that looks less available owing to their full time involvement in political issues, a leading analyst said.

The statement by a Standard and Poor’s rating agency official about Pakistan’s economy was also very important one, as he also underlined the unresolved issues on economic front and stressed upon addressing them on immediate basis. If government fails to prepare a comprehensive plan for fixing economy in crisis the stock market could go to new low levels of late 90’s, he replied and pointed out, the all time high twin deficits and inflation needed immediate attention.

After opening in red market saw no recovery to green throughout the session, according to KSE website. But the Exchange quoted figures indicated that it extended the day gains by another 12.21 points to 10,931.27 points intra-day high sometime during the session from pre-opening level of 10,919.06 points.

At a point of trading market had dipped to 10,484 points intra-day low – losing 435 points, but a little buying in the closing hours recovered market above 10,500 points level.

Losers outnumbered gainers 243 to 46 with 16 closing unchanged among 305 active stocks on board.

Highest volumes were witnessed in Oil and Gas Development Company at 9.125 million closing at Rs117.28 with a loss of Rs6.17, followed by Callmate Telips at 8.048 million closing at Rs1.90 with a loss of 47 paisa, NIB Bank at 7.177 million closing at Rs9.44 with a loss of Re1, Zeal Pak at 5.389 million closing at Rs1.47 with a loss of nine paisa and Engro Chemical at 4.824 million closing at Rs206.90 with a loss of Rs7.64.

originate from: http://www.amztrade.com/research/newsdetail.php?id=3759

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