The KSE-100 index gained 104.35 points during the week ended on September 3, 2010 and closed at 9,703.06 points mainly due to foreign investors' support. Trading also improved slightly and the average daily volume at ready counter increased to 50.37 million shares, or 7 percent, as compared to previous week's 47.07 million shares.
Market capitalisation increased by Rs 27 billion to Rs 2.712 trillion. Foreign investors remained net buyers of shares worth $8.0 million. However, individuals were the net sellers of $7.3 million.
On Monday, the market opened under pressure and the index lost 82.29 points to close at 9,516.42 points with a volume of 36.639 million shares. On Tuesday, the index increased by 296.63 points to close at 9,813.05 points with 81.645 million shares, on the back of expected resolution of Market Trading System in a meeting held between KSE and SECP.
On Wednesday, the momentum could not continue as the meeting remained inconclusive and the index declined by 77.67 points to close at 9,735.38 points, with 52.248 million shares. On Thursday, the index gained 27.51 points to close at 9,762.89 points with 43.817 million shares on the back of foreign investors' support.
On Friday, the index lost 59.83 points to close at 9,703.06 points with 37.515 million shares. Sana Hanif, analyst at JS Global Capital, said that the activity at the local bourse remained sluggish throughout the week, barring the trading session on Tuesday, where the KSE-100 index surged by 297 points on the back of expected resolution of MTS in a meeting held between the KSE representatives and the SECP. However, the actual result of the meeting was inconclusive and market participants remained sidelined due to continuing uncertainty over resolution of the said issue.
On the macro front, IMF announced a $450 million immediate relief package and hinted at the release of $1.7 billion post-completion of the 5th review under the SBA. The World Bank too topped its commitment to $1 billion from $900 million earlier, for reconstruction of flood affected areas. However, these positives were overshadowed by sudden jump in CDS spread by 210 bps, owing to higher risk of government borrowing required to fund flood victims. Moreover, Moody's maintained its rating for Pakistan at B3 despite fears over huge losses caused by the floods, but later in the week, it did downgrade outlook for 5 major banks to negative from stable earlier as it expects asset quality to deteriorate in the current scenario.
Oil and gas sector was the predominant outperformer posting a return of 2.9 percent, whereas banks were among major losers, registering a decline of 0.4 percent.
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