KSE falls 193 points as foreign funds offload

Wednesday, December 02, 2009

KARACHI: Though the Dubai debt crisis is likely to have a very little impact on the Karachi bourse, it caused great psychological pressure on Tuesday. The market, therefore, fell more than two per cent on foreign sell-off.

The KSE 100-share Index shed 2.10 per cent or 193.17 points and closed at 9,013.04 points.

Its junior partner the 30-Index lost 2.30 per cent or 223.56 points and concluded at 9,482.92 points.

The suspense regarding the Dubai crisis was over during the long Eid holidays, analysts said adding that the crisis affected the psyche of investors though it had almost no direct link with the local bourse.



Foreigners sold shares worth $4.51 million, according to NCCPL. Offshore investors have about 20 per cent stake in the total free-float on the local bourse and were expected to offload following the crisis, as they are direct affectees of the Dubia crisis, it was learnt.

All segments of local investors remained somehow positive, as all of them ended trading with injecting fresh funds.

Mutual fund managers and individuals poured in $1.92 million and $1.70 million, respectively. Companies, banks/DFIs, NBFC and other organizations cumulatively pumped $802,000.

“Only two listed companies on local stock market - Pakistan Telecommunication Company and United Bank - are likely to be affected by the Dubai crisis because of their exposure in Dubai accumulated debt,” it was learnt, “United Bank informed that it had a very limited exposure to Dubai World and its entities, which is mere $20 million.”

Among the pivotal stocks the Oil & Gas Development Company, Pak Petroleum, MCB Bank, National Bank, Habib Bank and United Bank were the only double-digit losers of points on indices.

Furqan Punjani at Topline Research said that concerns on recent Dubai crisis took a heavy toll on local bourse following a long weekend at KSE. There were fears that the recent credit woes could halt or slowdown the pace of remittances and Foreign Direct Investment (FDI) flows. Moreover, declining Pakistan dollar bond prices also discourages investors as it could raise the risk premium of the country. Investors remained cautious to enter in the market over political uncertainty as well, he added.

Ahsan Mehanti at Shahzad Chamdia Securities added that uncertainty over future commodity prices, high leverage cost and renewed security concern on SWAT suicide attack on MPA played a catalyst role in negative activity at KSE.

Hasnain Asghar Ali at Aziz Fidahusein said that heat from Dubai debacle, although psychological, forced the local bourse to melt with a high intensity, wherein due to various economic and internal issues an across the board sell off was witnessed, shallowness added to the misery, absence of buyers at intervals led to panic sell-off.

Turnover was thin at 89.83 million shares against 84.66 million shares yesterday. Futures volume fell to 0.157 million shares from 4.78 million shares traded in the last session.

Overall market capitalisation declined by Rs53 billion to Rs2,605 billion.

Among 350 actives, 227 stocks declined, 105 stocks advanced, while 18 stocks remained unchanged.

Highest volumes were witnessed in Bank of Punjab at 8.61 million closing at Rs16.96 with a loss of 54 paisa, Bank Al-Falah at 7.54 million closing at Rs13.57 with a loss of 52 paisa, Oil & Gas Development Company at 7.48 million closing at Rs104.06 with a loss of Rs2.33, Pakistan Telecommunication Company at 7.07 million closing at Rs17.19 with a loss of 54 paisa, and JS Company at 4.09 million closing at Rs28.56 with a loss of Rs1.40.