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Showing posts with label Karachi Stocks. Show all posts
Showing posts with label Karachi Stocks. Show all posts

Thursday, January 22, 2009

Karachi Stocks hits four-year low as foreign funds exit emerging markets

The continued distress-sale of shares by the foreign portfolio investors and irresolution of debt issue at Karachi bourse between brokers and banks pushed market down to new low of four-year on Wednesday.

With another notable plunge of 121.80 points or 2.32 per cent in this session, the KSE 100-share Index depreciated to 5,136.48 points. The day closing level is the lowest one after September 28, 2004 closing of 5,128.13 points.

The parallel running junior 30-Index slashed 152.04 points or 3.08 per cent and concluded at 4,782.97 points.

Hasnain Asghar Ali at Aziz Fidahusein observed that although private and government sector funds did stay prominent buyers in various main board stocks many even succeeding in trading above lower locks, foreign downpour strengthened further as it joined hand with selling by local participants thus never allowing the buyers to resist the high tides, and the KSE benchmark was yet again pushed to deep-red. Analysts said that foreigners were offloading their holding for one reason or the other. They withdrew another over $8 million in this session only.

“Perhaps, overseas investors know what are the true vales of each stocks and they would indulge into buying from those pre-supposed levels or they are reshuffling their portfolios in accordance with the new stocks market orders,” commented a leading analyst.

He maintained that in the newly emerging era - post economic recession period or recovery phase - some tier two stocks would occupy the place of leading stocks in top of the actives list and vice-versa. This phenomenon is, at present, in the making and become visible when every thing would have been settled, he added.

The unresolved issue debt, which brokers owe to banks, is not allowing bulls to show their muscles. Otherwise, bulls are ready to overcome the crisis and waiting for the green signal, other analysts said. With the massive correction in international oil prices and decline in demand of other commodities as well at world level, the oil and food inflations have started easing down in the country. Amid the trade and current account deficits have also started reducing in the last couple of months. These are the good signals for the local economy and would encourage equity investors to stage come back once the local issue of debt at bourses are resolved, they added.

Ahsan Mehanti at Shahzad Chamdia Securities said besides massive foreign selling and debt issue, the rupee depreciation and turmoil in the international equity markets also discouraged investors to remain on the sidelines.

This session, therefore, witnessed sharp decline in many of the stocks prices and recorded low turnover too.

The day turnover dropped down to 90.769 million shares as compared to 143 million shares changed hands yesterday - showing a decline of over 34 per cent on day-to-day basis. Activities in future market remained shunned.

Another outflow of Rs38 billion from the overall market capitalisation shrank it to Rs1,639 billion.

Out of total 270 actives, 198 stocks declined, 60 advanced, while the value of 12 stocks remained unchanged.

Oil and Gas Development Company remained the volume leader with 9.340 million shares closed at Rs44.29 with a loss of Rs2.17, followed by National Bank with 6.612 million shares closed at Rs51.94 with a loss of Rs2.73, Pakistan Telecommunication Company with 6.119 million shares closed at Rs12.96 with a loss of 58 paisa, Zeal Pak with 4.192 million shares closed at 47 paisa with a loss of one paisa and Hub Power with 4.036 million shares closed at Rs14.77 with a loss of 41 paisa.

Saturday, January 3, 2009

Life returns to the capital market


Life returned to Karachi Stock Exchange and things took a bright look after suffering gloomy atmosphere at least for last six months.

The market saw shapes of green after being gripped of bearish sentiments after the removal of the cap from KSE-100 which gained 40.39points to close at 5,793.57points level while turnover surged by 179% from yesterday to 210.8m shares. In the overall market, bulls were finally able to thrash the bears by 166 to 71 from overall 241 scrips traded today.

In fact the driving force behind igniting spark in the market was the injection of Rs20 billion State Enterprise Fund as the National Bank of Pakistan, Employees Old age Benefits Institution (EOBI), State Life of Pakistan and a banking consortium transferred Rs5 billion each to the Fund being managed by National Investment Trust.

Resultantly, fresh life in the market was quite visible from the beaming faced of the depressed brokers and investors who suffered heavily due to financial turmoil and suspension of the trade at KSE at least for three months.

It looks that the major issues concerning the market are about to be addressed within a couple of days to bring a spark in the market following activation of Rs20 billion fund sparked new hope in the investors.

It may be noted that several brokerage houses and agencies either compelled to suspend their business operations and thousands of people attached to the stock market were rendered jobless as a result of the financial turmoil which consequently forced the regulators to suspend business operations at Karachi Stock Exchange for more than three months from October to recently ended December 2008.

Many people earning their bread and butter from stock exchange had to switch over to other professions and most of them have to sell their assets including houses, cars and other valuables to make up the losses incurred in the wake of financial melt down at the capital market.

The uncalled for suspension of business at the capital market due to fear of a thud fall sent a bad message of the economy abroad and provided an opportunity to the credit rating agencies to for downgrading of the sovereign rating of the country. However, the fear of heavy correction proved true which is reflected in the drop of the index to the level of 5,753 from over 15000 point level when the financial crisis hit the economy.

Meanwhile NIT is quite ready to launch the Rs.20 billion NIT-State Enterprise Fund without losing any time as NIT has completed all necessary legal work which includes signing of the agreement with the financing institutions and the approval of Guarantees of the government of Pakistan.

The legal work which entailed a lot details and paper work including the registration, approval of the Fund, Financing Agreements, Guarantees etc all have been accomplished.

The fund can only invest in 8 eligible stocks which are identified as OGDC, PSO, PPL, SNGPL, SSGC, KAPCO, and NBP AND PTCL.

According to NIT, the Fund is intended to sell units to the non-resident Pakistanis after the initial operation and after the market stabilization. The stocks mainly related to strong state owned organizations would perform well and provide necessary security to the financers of the fund and send strong signals to the market which is overly depressed at present. Returning to day’s business, the investors took fresh positions in major blue chips items like OGDC, PTCL, UBL, DGKC and NBP which also were the volume leaders today.



Amanullah Khan

Karachi—Life returned to Karachi Stock Exchange and things took a bright look after suffering gloomy atmosphere at least for last six months.

The market saw shapes of green after being gripped of bearish sentiments after the removal of the cap from KSE-100 which gained 40.39points to close at 5,793.57points level while turnover surged by 179% from yesterday to 210.8m shares. In the overall market, bulls were finally able to thrash the bears by 166 to 71 from overall 241 scrips traded today.

In fact the driving force behind igniting spark in the market was the injection of Rs20 billion State Enterprise Fund as the National Bank of Pakistan, Employees Old age Benefits Institution (EOBI), State Life of Pakistan and a banking consortium transferred Rs5 billion each to the Fund being managed by National Investment Trust.

Resultantly, fresh life in the market was quite visible from the beaming faced of the depressed brokers and investors who suffered heavily due to financial turmoil and suspension of the trade at KSE at least for three months.

It looks that the major issues concerning the market are about to be addressed within a couple of days to bring a spark in the market following activation of Rs20 billion fund sparked new hope in the investors.

It may be noted that several brokerage houses and agencies either compelled to suspend their business operations and thousands of people attached to the stock market were rendered jobless as a result of the financial turmoil which consequently forced the regulators to suspend business operations at Karachi Stock Exchange for more than three months from October to recently ended December 2008.

Many people earning their bread and butter from stock exchange had to switch over to other professions and most of them have to sell their assets including houses, cars and other valuables to make up the losses incurred in the wake of financial melt down at the capital market.

The uncalled for suspension of business at the capital market due to fear of a thud fall sent a bad message of the economy abroad and provided an opportunity to the credit rating agencies to for downgrading of the sovereign rating of the country. However, the fear of heavy correction proved true which is reflected in the drop of the index to the level of 5,753 from over 15000 point level when the financial crisis hit the economy.

Meanwhile NIT is quite ready to launch the Rs.20 billion NIT-State Enterprise Fund without losing any time as NIT has completed all necessary legal work which includes signing of the agreement with the financing institutions and the approval of Guarantees of the government of Pakistan.

The legal work which entailed a lot details and paper work including the registration, approval of the Fund, Financing Agreements, Guarantees etc all have been accomplished.

The fund can only invest in 8 eligible stocks which are identified as OGDC, PSO, PPL, SNGPL, SSGC, KAPCO, and NBP AND PTCL.

According to NIT, the Fund is intended to sell units to the non-resident Pakistanis after the initial operation and after the market stabilization. The stocks mainly related to strong state owned organizations would perform well and provide necessary security to the financers of the fund and send strong signals to the market which is overly depressed at present. Returning to day’s business, the investors took fresh positions in major blue chips items like OGDC, PTCL, UBL, DGKC and NBP which also were the volume leaders today.