Healthy buying supported index

Healthy buying on last trading session supported the KSE-100 index to recover its losses and to close in positive at 8,107.94 points level with a net gain of 96.63 points during the week ended August 21,2009. The market witnessed mixed trend and the much awaited monetary policy failed to boost trading activities at the share market, analysts said.
The average daily trading volumes at the ready counter declined by 39 percent on week-on-week basis to 118.88 million shares as compared to previous week''s average of 194.41 million shares.
The overall market capitalisation, however, increased by Rs 24 billion to Rs 2.385 trillion. Foreign investor''s interest at the local equity market continued as a net inflow of $10 million was recorded during the week. The market witnessed negative trend on the first day and the index declined by 78.76 points to close at 7,932.55 points level with a total volume of 137.993 million shares on Monday.
Fresh buying on dips supported the index to recover 62.55 points to close at 7,995.10 points level with 106.865 million shares on Tuesday. However, the index lost 42.40 points to close at 7,952.70 points level with 122.952 million shares on Wednesday. The index recovered 20.75 points on Thursday and closed at 7,973.45 points level with 100.581 million shares.
The market witnessed healthy trading activities on Friday and the index surged by 134.49 points to close at 8,107.94 points level with 125.987 million shares. Mustafa Bilwani an analyst at JS Global Capital said that that 100bps cut in key policy rate to 13 percent by State Bank of Pakistan in monetary policy was below than market expectations and failed to draw investors to the bourse, which was visible in average daily volumes that declined by 39 percent.
Nauman Khan at Invest Capital Securities said that the monetary policy was finally announced, however, there are also raised worries about the renewed inflationary pressures on account of tendency of food price hike during Ramadan and expected resurgence in the oil prices in international market. This, along with the rifts in the political power corridors and prevalent liquidity problems dampened the rejuvenated investors'' confidence. As a result, investors opted to remain on the sidelines, shrinking KSE average daily volumes by a massive 39 percent. The volume leaders of the week were DGKC, PTC, OGDC, LUCKY and NML, which cumulatively accounted for 35 percent of the total turnover. On the positive front, Moody''s revised Pakistan outlook from negative to stable.