Bullish trend prevailed at Karachi share market during last week ending on August 4, 2006, and the KSE-100 index aggregately surged 419.06 points to 10,772.58 points, the market remaining in the positive territory for the fourth consecutive week.
Investor confidence improved depicted by increasing volumes both in the ready and futures markets. The market opened the week on a strong positive note on Monday, gaining 144.11 points.
On Tuesday, too, although the investors booked profits, the KSE-100 index closed in positive, adding 9.46 points. The positive opening remained buoyant through the week, pushing the index above the 10,700 level. Profi taking was due to the news regarding resignations by MQM ministers, coalition partner in National and Provincial Assemblies. Later they withdrew resignations after resolving the tussle amicably.
For all five days of the week, trading sessions closed with extended gains touching 11-week high mark on Friday at 10,772.58 points level. The market capitalisation crossed Rs 3 trillion mark to Rs3.009 trillion on Friday with an increase of Rs106 billion. Average daily turnover also increased to 226.625 million shares as compared to 225.556 million shares of previous week.
Energy, bank, telecom and fertiliser scrips performed well, while cement sector underwent mild correction. According to Atlas Capital Market report, the corporate results season kept the investors active throughout the week. Monetary Policy was welcomed as the market surged by 144 points.
Negating the impact of MQM ministers'' resignations the market again started gaining investors'' interest on the back of the news regarding listing of 10 companies on the UAE bourse, as a result of which heavy activity was witnessed in PTCL, UBL and BAFL whose major shareholders are UAE firms.
Support also emanated from exceptional result announced by PSO, which was in line with market expectations, but soon after the result it faced the brunt. The State Bank of Pakistan (SBP) directives on banks and reduction in price of cement created uncertainty for the banking and cement sectors.
Atif Malik of JS Research said that higher international oil prices and better corporate earnings, coupled with expectation of good upcoming results were reasons behind the bullish trend.
After a gap of 11 weeks, CFS rates at KSE touche official cap of 18 percent and CFS investment reached the peak of Rs 24.5 billion. Borrowing cost at CFS on Friday stood at 15.7 percent, up from 14.4 percent of previous Friday.
In the futures market, open interest in August contract was recorded at Rs 8.5 billion, showing an increase of 31 percent from previous week''s closing of Rs 6.5 billion, while annualised ready-future spreads in the futures market stood at 10.5 percent. Average volume in futures counter was 51.5 million shares (Rs 8.1 billion or $134 million), against previous week''s 57.0 million shares (Rs7.9 billion or $131 million). Futures volume was 23 percent of ready market in terms of shares, and 28 percent in value terms.
The week contributed the biggest share in the index as compared with last three weeks participation in the index. The corporate earning season remained the driving force behind bulls, helping the index register big gain.
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