LSE stages recovery

The share market was back on recovery path and made hefty gains on local as well as foreign buying in key sectors, particularly in banking stocks, which pushed the index up by 3.78 percent, during the outgoing trading week.
The week under review opened with a depressed note, but later fresh buying in banks, oil and gas sector, insurance and fertilisers put the market on path of recovery.
The market sustained this trend throughout the week with the support from local and foreign buyers who kept targeting the key sectors with special focus on banking sector, analysts said. According to some experts that lured by attractive price levels, local investor is also entering the market, which has increased volumes.
If the local investor continued showing its presence in the market, the turnover would keep growing, which will further boost the sentiment, the added. The LSE-25 index gained 169.04 points (3.78 percent) to finish the week at 4,540.17 as compared to earlier closing at 4,471.13 points. Trade turnover mounted to 50.376 million shares from 21.327 million, recording a marvellous improvement of 167 percent.
The share market moved in a very tight band with decline in trade turnover due to isolation of potential investors in view of political reasons and on rumours of FBI investigations against local brokers, on first day of the week under review. The LSE-25 index lost 12.93 points to 4,458.20 from 4,471.13. Trade volume squeezed to 16.756 million shares from 21.325 million shares, registering a decline of 4.568 million shares.
With a bearish start, the market kept moving in a very tight band, amid negligibly short-ranging fluctuations due to lacking participation from the investors. MCB Bank and PPL gained strength and added to their worth, while Adamjee Insurance and Arif Habib Securities suffered losses. Bullish trend prevailed on the second day with equities registering improvement amid ballooning volumes, due to fresh buying in banks.
The LSE-25 index showed an improvement of 71.99 points to 4,530.19 from 4,458.20 points. Volume increased to 32.960 million shares from 16.756 million shares. With an aggressive activity in Adamjee Insurance, petroleum and banking sectors, share prices maintained buoyant behaviour the third day gaining 0.4 percent. The LSE-25 index ended at 4,550.52 points as against 4,530.19, registering an improvement of 20.33 points.
Turnover surged to 34.391 million shares from 32.960 million soaring by 1.430 million shares. Bullish trend dominated the market throughout the day, led by Adamjee Insurance and Pakistan Oilfields. Banks and fertilisers also fared better and gained strength due to fresh buying activity.
Share prices moved ahead rapidly on second last day of the week following aggressive buying in insurance sector and key banks. The LSE-25 index closed at 4,608.60 points versus 4,550.52 of preceding session, registering a net improvement of 58.08 points. Volume escalated to 50.376 million shares from 34.391 million shares, increasing by 15.985 million shares. The market showed an aggressive tone and moved in positive zone on buying interest in banks, especially in Bank of Punjab and MCB Bank, insurance and oil sectors. The KSE index breached the psychological level of 12,500, which also brought a positive impact on the local share market.
Apart from banking sector, exploration companies also fared better on expectations of increase in crude oil price in the international market. Gushed by buying in oil sector and fertilisers, equities continued moving on the weekend while the index added another 0.68 percent to its worth.
The LSE-25 index, with a net gain 31.57 points, closed at 4,640.17 as compared to 4,608.60. Overall turnover went up to 56.883 million shares from 50.376 million, registering an improvement of 6.507 million shares. Due to increased interest, volume mounted up while buying interest in National Bank, Arif Habib Securities, oil and fertiliser sectors helped the market stay in bullish zone.
According to analysts, attractive levels, foreign buyers growing interest and postponement of strike in Karachi helped the market come back on part of recovery.
Attracted by low levels, local investor also entered the market, which increased the volume which has been a disappointing factor since imposition of CVT on shares transactions a couple of years back, they added. If, as being strongly anticipated, the government curtails the rate of CVT and withholding tax on shares transactions, turnover will escalate which will not only encourage local investors and enhance the volumes, but also enhance the government revenue under this head, the analysts observed.