RECORDER REPORT
KARACHI: The Karachi share market Friday seesawed after Prime Minister Nawaz Sharif accompanied by Finance Minister Ishaq Dar visited the bourse.
The overbought market, as a senior stock broker called it, moved both ways with KSE 100-share index first showing an upward trend on the investors' expectation that the visiting finance minister would declare the abolition of five percent bonus tax. A deadly blast in the interior of Sindh was a major factor behind risk aversion.
The sentiment-driven benchmark index took a sudden dip to a negative territory as soon as the Premier and the finance minister left the trading hall without announcing any incentive. Thanks to the current earnings announcement session that helped the volatile index finally settling in the green zone gaining 35 points at 34,443.87 points compared to Thursday's 34,408.74 points.
"Investors were expecting good news from the finance minister whose arrival news was abuzz since morning," said Haji Ghani Usman, chairman demutualization committee of KSE. Surprisingly, the senior broker said, the Prime Minister came with the finance minister but did not announce any incentive.
The good news equity investors were expecting, Chairman AKD Group Aqeel Karim Dhehdi said, was the abolition of five percent bonus tax. "Investors were expecting it but when got disappointed the market went into the corrective mode," the senior broker told Business Recorder.
Commenting on the agenda of the prime minister's rare and surprise visit to the stocks market, a broker said: "When the market performs well the politicians tend to take credit, otherwise brokers are responsible." "He (PM) wants to be seen at the market that is performing well," he quipped.
The day's trading saw the index acting in a seesaw mode. Before the Premier's arrival, at around 3:20pm, the index stood at 150 points up. But it nosedived and shed 27 points at 4:05pm as soon as the prime minister left the KSE.
"Investors went for profit-taking when got disappointed by the premier," viewed Usman, a former KSE Board member.
The index hit the intraday high and low of 34,614.56 and 34,347.29 points, respectively. The total shares traded were recorded at 349 millions compared to 206.5 million of the previous session.
The volume also rose to 24 billion shares from Rs 15 billion with market capital showing the same trend to close at Rs 7.798 trillion.
Usman said the market was overbought and was, therefore, likely to go into corrective mode during next week. Analyst Ahsan Mehanti said the index closed higher in the earnings announcement session led by cement and fertilizer scrips on strong valuations.
"Oil stocks fell amid falling international oil prices," he said.
Falling fuel costs and coal prices played a catalytic role in bullish sentiment in cement sector, said the analyst. According to Mehanti, the market felt the heat as a terror blast killed more than 50 people at an Imambargah in Shikarpur. The terror attack, however, could not deter the offshore investors whose net buying accounted for more than $ 358 million. Fauji Fertilizer Bin Qasim 5.8 million with 22.4 million shares topped the list of best performers, gaining Rs 49 to close at Rs 52.24.
Others were Fauji Cement 22.3 million, Pak Elektron 21 million, Engro Fertilizer 20.4 million, Maple Leaf Cement 19.8 million, Cherat Cement 14 million, Pakistan International Bulk Terminal 12.3 million, Fauji Fertilizer 12 million, K-Electric 11.89 million and D.G Khan Cement 13.3 million shares.
The futures market rallied with a turnover of 75.6 million shares compared to Thursday's 52 million.
