KSE-100 loses 861 points on lack of positive news

KSE-100 loses 861 points on lack of positive news
KARACHI: The Karachi stock market witnessed bearish trading week during which the benchmark KSE-100 Index reached its 19-month low level of 10,171 points.It was because of the huge meltdown in equity values mainly on account of continued monetary tightening by the central bank, cut in OMCs and refineries margins and huge offloading by foreign investors, traders said. Market witnessed selling pressure as investors concerned over foreign selling, expectations of downgrade Pakistan credit rating status and selling continued as margin calls on few brokerage houses besides, law and order situation in the country.The KSE-100 index during the week shed 861 points (8 percent) to close at 10,171 points level compared to previous week’s 11,032 points level. Average daily volumes stood at 140.5 million shares, which was up by 22 percent compared to previous week. Analyst at Atlas Capital Market said KSE 100 index shed 860.78 points during the current week mainly on account of weakening local economic outlook. The index opened on a negative note taking a nosedive on the first trading day as it plunged over 4 percent. The following day index was down by 130 points with most investors speculating a 50bps to 200bps increase in the interest rate along with some increase in SLR and CRR, to be announced in the monetary policy later during the day. The Governor SBP announced an increase of 100bps to tackle the problem of rising inflation and made no change to SLR and CRR rates. It brings a positive rally at the KSE helping the index to recover 404.83 points Wednesday. However, the following trading days showed an opposite picture as the index remained under pressure losing 269.44 and 412.19 points respectively to close at 10,171.39. The investors’ lack of confidence was evident in the declining average daily trading volumes, which registered a 28.65 percent decline to reach 100.24 million as compared to 140.45 million registered last week. The index is expected to remain under pressure in the week ahead and thus would recommend a precautionary stance.News regarding slashing of refiners’ deemed duty on diesel (i.e from 10 percent-7.5 percent) and OMCs margins (by 25-27 percent) also created negative sentiments in the market. As a result market cap of refineries and OMCs fell by 8.5 percent and 12 percent, respectively. Despite monetary tightening, average CFS rate remained unchanged at 14.4 percent whereas amid liquidity issues and lack of investors’ confidence, CFS investment stood at Rs 25.7 billion, its lowest level after 21-months and down by 5 percent WoW.The market performance was worst this week as compare to previous week. The KSE 100 index closed at 10611.14 pts with a loss of 860.78 points. KSE 30 index closed at 12040.20 pts with a loss of 1077.98 points.Trading activity was worst this week as compared to the previous week, as the average ready market volume stands at 100.2416 million shares as compared to 124.316 million shares. Market capitalization stands near to Rs 3.178 trillion. CFS value decrease by 1.72 percent to Rs 30.567 billion as compared with previous week’s value of Rs 31.102 billion and the highest CFS Scrip were NBP, AHSL, POL and DGKC. staff report