KARACHI, Sep. 6, 2010 (Xinhua News Agency) -- As tension grows between the chairman and the market players over the launch of leverage product, equities at Pakistan's Karachi Stock Exchange (KSE) witnessed a choppy trading on Monday and volumes dropped down to record low levels.
The benchmark KSE 100-Index managed to swell by 0.03 percent or 3.04 points after a full-day volatility to end at 9,706.10 levels, KSE 30-Index followed the general trend and almost finished flat with 0.03 percent or 2.53 points increase to close at 9,551.50, KSE All Share Index couldn't stay away from the affects and only inched up by 0.01 percent or 0.62 points to conclude at 6,778.53, and KMI 30-Index moved slightly up by 0.03 percent or 4.32 points to finish the day at 15,010.49 levels here.
The market showed some promise at the start of the fresh trading session and soon the main index achieved the highest level of the day of 9,741.06. However, the lack of interest showed by the local market participants over the ongoing cold-war among the top market players over the launch of the leverage product at the Exchange never helped the market to continue the early momentum and a volatile trading session was witnessed where to-and-fro movement was quite visible. In the second part of the trading session, the key index hit the lowest level of the day of 9,664.57 before regaining the 9,700 levels and closed above it.
Market analysts told Xinhua that market is under the shade of multiple factors including downward trends in the global markets; serious challenges facing Pakistan's economy with floods further increasing them.
They further stated that if all of these factors were not enough,then the market big-wigs are involved in a fix over the launch of the leverage product where it looks likely that the Securities and Exchange Commission of Pakistan (SECP) and some of the top KSE directors would be able to finally launch the product in near future.
They went on to say that it's still quite a debatable issue if launch of Margin Trading System would help improve the volume numbers because the recent declines in the market were not because of the lack of the leverage product but the massive floods in the country that have dented the national economy hard.
It is important to mention here that the taskforce under Justice (Retd) Saleem Akhtar had termed the leverage product ( Badla) as the main cause behind the huge crash of 2005 at the Exchange and had recommended the market authorities not to launch any such product at the Exchange in future.
As per the figures released by the National Clearing Company of Pakistan Limited (NCCPL) for Monday, the foreign investors, despite of all the negativity associated with Pakistan's economy and its stock markets, continued to invest heavily here as they net invested 102.451 million rupees or 1.201 million U.S. dollars.
Individual investors were not only less in number but they also ended up on the selling side as they net sold shares worth 55.050 million rupees or 0.645 million dollars, local companies also showed little interest and net sold their holdings worth 11.038 million rupees or 0.129 million dollars, Mutual Funds turned out to be net buyers here with a net buying of 5.364 million rupees or 0.062 million dollars, banks/DFIs came up with net selling of 56. 566 million rupees or 0.663 million dollars while Non Banking Finance Corporations (NBFCs) net invested 15.692 million rupees or 0.183 million dollars here.
Market volumes plunged to record lows of only 19.631 million shares, which are 17.884 million shares lower when compared with Friday's trading of 37.515 million shares as investors stayed away from the trading proceedings owing to lack of confidence over an internal cold-war among the market players on the subject of launch of leverage products at the Exchange, especially the Margin Trading System (MTS).
Market's trading value further slipped down to 825.158 million rupees from 1.001 billion the other day thus showing a decline by 175.958 million. The market capitalization slightly increased by 242.444 million to 2.71234 trillion from 2.71258 trillion on Friday.
Lotte Pakistan PTA Limited was the top traded scrip of the day with trading of 1.823 million shares, followed by Lucky Cement, Jahangir Siddiqui Company Limited, Dera Ghazi Khan Cement, and Hub Power Company SPOT with turnovers of 1.250 million, 1.203 million, 1.182 million and 0.932 million shares.
In broader market, a total of 334 companies changed hands during the course of Monday where prices of 178 scrips declined, 129 increased while rates of 27 issues stayed unchanged at Friday' s levels.
Nestle Pakistan SPOT was the top price gainer of the day with 76.95 rupee jump in its share value to end at 1913.05 while on the other hand UniLever (NYSE:UL) Pakistan was the biggest decliner with 64.59 fall in its scrip price to close at 3,931.61 rupees.(1 U.S. dollar equals 85 Pakistani rupees)
