Badla extension rumours, payment from the UAE-based Etisalat and the increase in oil and gas prices prompted the investors to build fresh positions in some of the key scrips cautiously, as selling pressure forced the index close below 7500 level.
Once again, the KSE-100 Index made an attempt to cross 7500 index level, but closed at 7465, 1.6 percent up from previous weekend, while the market capitalisation, on the other hand, reached the level of Rs 2.1 trillion.
However, during the outgoing week volumes at the KSE remained on the lower side with average daily turnover of 199 million shares or Rs 21.3 billion against 234 million shares and Rs 25.6 billion, respectively recorded previous week. Also, overall leveraged position has declined by 5 percent and 4 percent to 202 million shares and Rs 22 billion, respectively.
Activity from the last week continued in key banking stocks as NIT, Pakistan''s largest mutual fund, is due to announce its full year results over the weekend, and the market is anticipating healthy dividend. Oil stocks also remained in limelight on the back of the increase in international and local oil prices.
Nonetheless, the fear of upward revision in NSS rates kept many investors at high alert. Also the year-end effect continued this week keeping lower liquidity in the badla and ready market. This, as a consequence, increased leveraging cost for the investors.
This was another tightly range-bound week in the market with an overall bullish trend. The KSE-100 index opened at 7351 on Monday to close at 7464 on Friday, gaining 113 points. The low print of the week, 7234 was hit on Monday. The high of the week was hit on Thursday when investors made an attempt at the much-tested 7500 resistance, and went as high as 7538. The index stayed within a tight range of 7250-7500 throughout the week.
On Monday, the market opened at 7351 and after an early spike, continued last Friday''s decline to close at 7255. The trading volumes were very low (119.3 million) as the badla phase-out resulting in liquidity crunch, made investors nervous, and forced them to offload their positions. Stock prices declined across the board, with PSO and PTC being the main losers. PTC breaking through the lower end of its trading range was the main trigger in breaking the sentiment of the market.
With the liquidity crunch triggered selling pressure, investors entered the market on Tuesday with high hopes. Stocks were cheap and index trading at lower end of the trading range make it an ideal opportunity for buyers to have their day index gained 160 points. Gains were made across the board with E&P and the telecom sector leading the way. PTC''s return into its trusted trading range, on Etisalat''s payment rumour, helped the market gain confidence which was further bolstered by a healthy trading volume of 209.5 million shares.
With their sights set on the 7500 mark, buyers pushed the index up by another 81 points to close at 7496 on Wednesday. The 7500 mark once again provided to be a major hurdle with the selling pressure coming in every time the index closed in on the 7500 mark, as 261 million shares traded on the day showed investors'' confidence trading at higher end of the trading range.
The banking sector, neglected the day before, made major gains with NBP exploring new trading territory. The cement sector was a laggard, losing its valuation on rumours on the cement price decline front.
Thursday''s trading was within a very tight range of +40 and -40 points with the index oscillating between positive and negative territories. The index opened at 7494 and closed at 7450, down by 44 points. Buyers made a final push at 7500 level, pushing the index as high as 7538, but failed to sustain the higher level.
Marginal losses were made across the board with PSO going against the wind, and gained on news regarding the oil price increase. However, the index lost only 44 points after failing to sustain 7500 plus level showed that investors were still comfortable trading at prices near the higher end of trading range and no major selling pressure was triggered.
The index opened at 7450 on Friday and after a mostly directionless day, closed at 7464, marginally in positive territory. A low volume of 150 million shares showed that investors were ready to hold on the stocks at current prices over the weekend and there were enough buyers to absorb the pre-weekend selling pressure without losing ground.
Decent intra-day gains were made as the index crossed 7500 before lunch, but there was mixed closing at the end of the day, leaving the index at higher end of the trading range for this week.
While the PTCL euphoria is gradually exiting the market, analyst from KASB Equities expects other issues to enter the limelight in the weeks to follow.
Any developments on extension in badla financing could prove to be a positive turning point with far-reaching implications for fortunes of the market. In addition, the keenly awaited announcement of NIT''s dividend for financial 05 should see interest in banking scrips - Faysal Bank, BoP, and National Bank. Key stocks to focus should be on Callmate Telips, Kapco, POL, Faujis and Packages.
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