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Sunday, 1 January 2012

Daily Stock Market update: 02 Jan,2012


Karachi Stocks Down 54.05 Points:
KARACHI, Jan 02: The KSE-100 index was at 11,293.61 down 32.68 points. (today 12.02 pm)

December 30, 2011

Nestle Pakistan
Rs 159.23
UniLever Pak Ltd
Rs (164.05)
Siemens Pak
Rs 49.40
Attock Petroleum
Rs (5.85)
Wyeth Pak Limited
Rs 19.23
Engro Corporation
Rs (4.57)
Bata (Pak) Ltd.
Rs 14.18
Pak Oilfields
Rs (4.50)
Fazal Textile
Rs 11.74
MCB Bank Ltd.
Rs (3.52)

KSE 30 – Shares Index
Previous 10,318.16, Friday’s 10,179.03, minus 139.13 points
KSE 100 – Shares Index
Previous 11,435.67, Friday’s 11,347.66, minus 88.01 points
Previous Rs.2,966.834bn, Friday’s 2,945.784bn, minus 21.050bn
NIB Bank 8.139m, TRG Pakistan 7.730m, Habib Sugar 4.732m, Azgard Nine 3.195m, PTCL 2.825m shares.
TONE: easy, total listed 638, actives 296, inactives 340, plus 98, minus 113, unchanged 85
Karachi Stocks fall 88 points on year-end trading
KARACHI: The stock market finished the last session of the year on an easy note as some of the leading investors eyeing a robust year-end closing failed to muster enough support to be on the winning side.
Reports of gas emergency by the new year, which will have a big toll of the industrial production, apex court’s order to set up probe commission on memogate issue and institutional selling to meet year-end liquidity needs to put the market in the back gear and robbed it of a firm year-end closing, said analyst Ahsan Mehanti.
The KSE 100-share index managed to stay well above the coveted level of 11,000 points at 11,347.66, off 88.01 points as compared to previous 11,435.67 points, reflecting the weakness of leading base shares, notably in the fertiliser sector.
Samar Iqbal, another analyst said during the last couple of sessions leading bulls appeared to be active and were inclined to
outwit bears after having made strong covering purchases on the risk-free blue chips but reports of a massive gas tax did not allow them to protect the benchmark from the bear onslaught.

“The weakness of the fertiliser sector, which may be the chief affectee, dragged the entire along with them in the minus column under the lead of Engro Corporation,” some others said.
How the new year opening would now be is everyone’s perception, some said “but revival of foreign demand on the oil counter and a bit easing in the developing political heat, could significantly reinforce investor confidence in the new year opening.”
During previous couple of years, the new year opening has always been a bit promising on which strong rallies were later built-up, they said and added the absence of strong support from the local institutions and leading market operators worked against the underlying sentiment.
Top gainers were led by Nestle Pakistan and Siemens Pakistan, up Rs159.23 and 49.40, while prominent losers were led by Unilever Pakistan and Attock Petroleum, off by Rs164.05 and 85.
Traded volume rose to 62.569m shares from the previous 45m shares but losers held a lead over the gainers at 113 to 98, with 85 shares holding on to the last levels.
The active list was topped by NIB Bank on reports of management change and was quoted higher by one paisa at Rs173 on 8m shares followed by TRG Pakistan, steady by eight paisa at 1.22 also on 8m shares, Habib Sugar, off Rs1.15 at 21.91 on 5m shares, Azgard Nine, lower by 23 paisa at 2.85 on 3m shares, PTCL, up 41 paisa at 10.39, Fauji Fertiliser Bin Qasmi, lower by Rs1.76 at 42.43 on 3m shares, and Bank of Khyber unchanged at 5.40 also on 3m shares.
They were followed by Engro Corporation, sharply lower by Rs4.57 at 92.70 on 2m shares, Dawood Hercules, steady by nine paisa at 42.39 on 2m shares and Hub-Power, off 50 paisa at 34.20 also on 2m shares.
FUTURE CONTRACTS: Both the settlements of Bank Al Falah came in for strong buying, and while the ruling contract was quoted unchanged at Rs11.20 on 2.001m shares, the later was marked down by 14 paisa at 11.33 on 2.00m shares, while Azgard Nine was marked down by 27 paisa at 2.82 on 1.622m shares.
They were followed by Engro Corporation, off Rs4.58 at 93.63 on 1.069m shares and Fauji Fertiliser Bin Qasim, lower Rs1.72 at 42.70 on 0.855m shares.
DIVIDEND: Shahtaj Sugar cash at the rate of 125 per cent, Al-Noor Sugar, 30 per cent, BMA Express Cash Fund, interim, 2.48 per cent, Khairpur Sugar nil for the year ended Sept 30,2011.
Nestle prevents heavier stock fall in 2011
KARACHI, Dec 31: The equities at the Karachi stock market plunged 6 per cent, representing fall of 674 points in on the KSE-100 index, which closed at 11,348 points on Friday, the last trading day of the year 2011. At the start of the year, the index stood at the level of 12,022 points.
Gloomy as that sounds, the market would have reflected much poorer performance, but for the helping hand extended by the stock in consumer goods company – Nestle Pakitan. But the fact that the support extended by the stock was close to the year has raised many an eyebrows. In just ten trading sessions before the end of 2011, the price in Nestle stock galloped by as
much as 61 per cent.

Nestle Pakistan being one of the highest quoted scrips and the KSE-100 index a market capitalization based index, the average index weight of Nestle in the index stands at 4.9 per cent.
With a minimal free-float of 2.27 million shares or just five per cent of the total outstanding shares in the company, the Nestle stock price can easily be moved either way by trading small amount of shares.
Average daily volume for Nestle in 2011 stood at only 354 shares.
Back of the envelope calculations show that the sudden jump of 61 per cent in just ten sessions in the market price of Nestle share contributed as much as 331 points to the KSE-100 index. Were it not for the contribution by Nestle, the stock market would have crashed by 961 points, posting annual loss of 8 per cent in 2011.
Hamad Aslam, head of research at Lakson Investments, pointed out that without the Nestle contribution the index would have closed at 10,017 points, the below 11,000 level causing a deep dent to the investor sentiments.
Many market participants, who would only talk on condition of anonymity, said that it could be either an effort to ‘manipulate’ the index or an effort at ‘window dressing’. But who would benefit from such distortions in the actual numbers. It could not be
the stock exchange itself for the market performance is not of much value to signify its own performance.

“It is the punters who have the interest in artificially propelling the index,” says Hamad. He reasoned that they hold heavy portfolio of equities and it serves their interest to show a lighter fall, lest the investors run out of the market in fear. Those who
have an eye on the matter pointed out that just before the close of financial year to June 30, 2011, Nestle stock had mimicked similar trend, rising steadily by 52 per cent in the last 12 sessions pushing the price of the stock up to 5,475, from Rs3,604 on
June 14.

“Given that it was pure manipulation and not supported by genuine buying, the stock eventually lost 60 per cent of its value in the next five months,” says the Lakson Investments, research head.
Another market watcher included the stock in Unilever—also the fast moving consumer good company, as vulnerable to such price manipulation by punters. He pointed out that the average daily business in Unilever amounts to no more than 514
shares in 2011, which was why its price jumped by Rs1,206 to Rs5,566 at end of 2011 from Rs4,360 at the start of the year.

His calculation showed that Unilever contribution to the index average weight being 0.05 per cent, the stock had added 60 points to the KSE-100 index. All of that showed that just the two stocks, Nestle Pakistan and Unilever Pakistan, were instrumental in adding 287 points to the index, to limit the loss for year by 6 per cent against the more reasonable 8 per cent.
Mohammed Saleem Mansoori

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