The Karachi share market witnessed a mixed trend during the outgoing week ended October 31, 2009 due to investors' cautious stance over security concerns and the KSE-100 index finally closed at 9,159.18 points level, with a meagre increase of 8.33 points on week-on-week basis.
"Despite strong corporate results, security concerns continued to dampen market sentiment in the outgoing week and after gaining a handsome 224 points on Monday, the KSE 100 index closed the week flat at 9,159 points", analysts said.
Average daily volumes declined by 8 percent on weekly basis to 187 million shares as compared to previous week's average of 204 million shares. The overall market capitalisation slightly increased by Rs 2 billion to Rs 2.655 trillion. Though foreigners returned as net buyers, local mutual funds remained major sellers on security concerns.
Mustafa Bilwani, an analyst at JS Global Capital said that the outgoing week saw no let-up in security situation which continued to cast a shadow over the trading activity at the bourse. Blast in Peshawar on Wednesday in particular dampened investor mood as the market fell by two percent in the last 3 days of the week.
Though market sentiment remained subdued amid security concerns, selective buying was witnessed in few major stocks. AICL and ABL in particular posted handsome gains of 19.6 percent and 15.3 percent respectively, on strong results. Amongst other results, DGKC, Lucky, HBL, AKBL posted better than expected earnings while results of OGDC, HUBC, PTC and NML were in line with market expectations.
Though foreigners returned as net buyers in the outgoing week, heavy selling was observed from local mutual funds. Foreigner's bought shares worth $24.8 million and sold shares worth $15 million, resulting in net buying of $9.8 million. However, local mutual funds were net sellers of shares valuing $13.9 million, hence outscoring the positive flow from foreigners.
Nauman Khan at Invest Capital Securities said that the week saw erratic movement at the premium capital market of the country as the benchmark KSE100 index moved in a wide band of 404 points. On one hand, heightened security continued casting doubts in the mind of investors while positive developments on the political front coupled with attractive levels lured the investors, on the other hand.
The week commenced with much of optimism on the back of US Secretary of State's visit inducing fresh buying at the bourse, but, the unfortunate event in Peshawar forced the investors to offload their positions. As a result, the healthy gain of over 200 points of the very first trading session pushing the index over 9,350 points, gradually eroded away. However, SBP's 2.5-3.5 percent GDP growth projections revived investor interest pushing the market in green. Overall, KSE-100 registered a minuscule increase of 0.1 percent on weekly basis to close at 9,159 points.
The week registered FIPI net inflows of $9.9 million, reiterating foreigners' interest in the KSE. Furthermore, new trigger of start-up of Manazalai Gas Processing Facility brought buying in the E&P sector which at the start of the week was victimised to heavy selling on OGRA's notification regarding reduction in wellhead gas prices coupled with OGDC's below-expectation results and dividend payout for the first quarter of FY10.
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