Though Karachi faced two big shocks during last week, enough to shatter the confidence of investors, but the share market succeeded to keep its head high as it ended with gains on last day pushing the index higher than previous week.
The deteriorating law and order situation in Karachi forced the Chief Minister of Sindh to leave the seat, and Ali Mohammad Mehar had to resign.
The share market ignored the resignation of Sindh Chief Minister and continued its journey on positive side and attracted heavyweight buyers to remain in the arena.
The new Chief Minister, in a quick move, succeeded to take the command of the most violent but equally important Sindh province.
But the new Chief Minister could hardly sit in his new position when a military convey was attacked and the Corps Commander Karachi narrowly escaped from being hit during showering of bullets near Clifton bridge.
The apparently well-planned attack on military convoy really jolted the share market which sunk on Thursday, losing 92 points.
In the start of the day the shares market received news about the attack on the military convoy taking lives of at least 10 and a bomb also exploded while another massive bomb was defused at the same place.
The news of fierce fighting in Wana the same day, which took more than 20 lives, had already left dark shadows on the sentiment of the market.
KSE-100 index plunged to as low as 5325.2 points losing 139 points but slowly it recovered and finally ended with a loss of 92.94 points to settle at 5371.2.
Some analysts felt that it was difficult to convince the buyers for investment in short term; rather they advised them to sell their long positions and wait on sidelines before re-entering the market. They wanted to stay away till budget.
However, it was a common understanding among the investors that last week rallies before budget would be bullish but the unexpected incidents shattered whatever calculations they had made. However, the week ended with some gains compared to previous week showing resistance against shocks.
However, hopes remained alive that the budget would bring some relief in taxes and incentives for industries. Cement sector performed well, keeping the sentiment of the market high. It has been a catalyst for the share market for a couple of weeks.
The cement sector was the leading one which kept the market sentiment high and attracted investors. Cement sector is expecting good news in budget scheduled to be announced on Saturday.
The law and order situation kept the buyers under pressure but the punters were seen active in the cement and banking stocks.
Cement data for the eleven months of FY-04 shows a growth of 18 percent. Total dispatches have grown to 12.2 million tons for the period July-May-2004 as compared to 10.4 million tons for the same period last year. Exports also increased but due to expectations of price decline in the budget, the cement sector started performing weakly.
It was interesting that four days of the previous week witnessed increase in the KSE-100 index but the jolt emerged after attack on military convoy snatched the achievements and 92 points were written off in one-go.
The market proved mature as far as volume is concerned and total shares traded in the week were 1971 million but never witnessed panic during the week.
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