IMF loan tranche uncertainty drags KSE lower

 KARACHI: The Karachi share market dropped on Wednesday owing to uncertainty about the release of the next tranche of the International Monetary Fund (IMF) loan to the country, dealers said.

“Negative activity was witnessed because of concerns about the country’s fiscal position as government officials met an IMF team to discuss the release of the next tranche,” said Ahsan Mehanti, a director at Arif Habib Investments.

The KSE 100-share index lost 64.22 points, or 0.60 percent, to close at 10,617.65 points. The KSE 30-share index shed 91.30 points, or 0.89 percent, to end at 10,168.59 points. Shares of 375 companies were traded, out of which 153 advanced, 203 declined, while 19 remained unchanged.

Analysts said that the sentiment at the market was dampened by rising circular debt concerns†after oil marketing companies (OMCs) stopped fuel supplies to power producers and†expectations of rise in yields on government papers despite continuing foreign interest in oil and gas, banking and fertiliser†sectors.

Samar Iqbal, a dealer at Topline Securities, said the market took a plunge of 64 points because of selling by local institutions. He said the sentiment was hurt further by rumours that Securities and Exchange Commission of Pakistan (SECP) was averse to amendment to the Articles of Exchange that members planned to effect at the extraordinary general meeting on November 04 to have a member chairman of the exchange.

Hasnain Asghar Ali, a dealer at Aziz Fida Husein, said that main board stocks faced massive sell-off by local financial groups and corporate participants. Across-the-board selling made the prospective accumulators cautious, he said.

“Increase in turnover in both main board and mid-tier stocks mainly due to high volatility gave opportunities to day traders.”

Analysts said hopes of revival of badla system in a more stringent form, which carries the potential of allowing increase in turnover and boosting valuations of main board stocks, restricted the decline. But day-end panic and whispers of offloading by offshore accounts in index heavy weights again led to selling towards the end, they said.

The ready market volume declined to 106.159 million shares from 108.157 million in the last trading session. Highest volume was witnessed in Dera Ghazi Khan Cement (DGKC) with trade of 9.588 million shares. The scrip lost 98 paisas to close at Rs26.74. It was followed by LOTPTA with trade of 8.877 million shares. It lost six paisas to end at Rs10.28. Bank of Punjab (BOP) was the third with trade of 8.371 million shares. It gained 22 paisas to finish at Rs9.65. Attock Refinery performed well in anticipation of better margins.