Mixed trend was observed at Karachi share market during the week ending on Sep 26, 2009 with healthy trading volumes on the back of foreign investors, coupled with local investors' interest. The week had only two trading sessions as the market remained closed on Sep 21-23 due to Eid ul Fitr holidays.
Aggressive buying was seen as both local and foreign investors took fresh positions on Thursday, the first trading day of the week, due to investors' expectations about the Friends of Democratic Pakistan meeting. The investors' expectations regarding positive news during the President's visit of the US also encouraged them to take fresh positions. As a result, KSE-100 index surged by 227.43 points, closing at 9,664.25 points.
The market witnessed heavy trading activity and the average daily volumes increased by 134 percent to 421.881 million shares. Market capitalisation increased by Rs 68 billion to Rs 2.795 trillion.
Foreign investors' interest continued and a fresh inflow of $8.1 million of foreign portfolio investment was recorded during the week. The offshore investors bought shares worth $22.8 million and sold shares worth $14.7 million. On Friday, the index crossed 9,800 points mark to 9,839.93 points intra-day high, but closed at 9,664.25 points with a loss of 49.58 points, with volume of 450.991 million shares.
Bilal.Qamar at JS Global Capital said that the market continued its upbeat momentum in the outgoing week as the Friends of Democratic Pakistan meeting and announcement of the upcoming Monetary Policy Statement (MPS) kept investors on the buying side.
He said that the investors awaited a favourable outcome from the New York summit on Thursday, which saw the market rally by 277 points or 2.9 percent. However, the outcome was nothing but disappointing except for President Obama's announcement to triple the non military aid to Pakistan to $1.5 billion a year through 2014.
Fertiliser sector was among the top performers with market capitalisation increasing by 7.6 percent. The rally was led by higher demand of urea as the procurement for the rabi season is underway. Similarly, the textile and the banking sector posted an increase of 4.7 percent and 2.6 percent on the back of positive news from the Textile Policy whereas foreigners showed interest in the banking sector. Resultantly, average daily volumes remained high.
Muniba Saeed at Invest Capital Securities said that the investors at the KSE remained fully energised with activity in the market as measured by average daily volumes which increased by a gigantic 134 percent on weekly basis.
The week remained reasonably exciting with the market testing the 9,800 points level mainly on the back of the much-awaited FoDP meeting for inflows coupled with aid expectations. With the TFC issue having finally materialised, the market saw revived confidence in the entire energy chain scrips. Moreover, support was provided by increased urea DAP offtake (up by 737 percent on monthly basis) along with $12 million improvement in the forex reserves of the country. However, negativity was injected by unfulfilled expectations of inflows from the FoDP meeting along with increased SPI number for the week giving rise to concerns regarding the possibility of a rate cut in the upcoming monetary policy.
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