Positive trend on KSE

Positive trend was witnessed at Karachi share market during the week ended on April 22, 2011 on the back of good corporate results and improved economic indicators. The KSE-100 index registered an increase of 270.14 points and closed at 11,954.37 points.
"Fresh buying was seen from both local and foreign fronts, which helped the index to breach through 12,000 points on intra-day basis. However, it closed slightly lower at 11,954.37 points", one analyst said.
Trading improved and the average daily volume at ready counter increased to 62.92 million shares, or 3.9 percent, as compared to previous week's 60.52 million shares.
Market capitalisation increased by Rs 66 billion to Rs 3.179 trillion.
Foreign investors turned net buyers of shares worth $1.09 million as compared to a net selling of $2.9 million during previous week.
On Monday, the market started with a slightly bearish tone and the index lost 9.40 points to close at 11,674.83 points with volume of 47.270 million shares.
On Tuesday, the index registered decline of 75.55 points to close at 11,599.28 points with 56.301 million shares.
On Wednesday, the situation improved on the back of reviving interest of both local and foreign investors on dips and the index registered a healthy increase of 145.78 points to close at 11,745.06 points with 72.964 million shares.
On Thursday, the index increased by 178.53 points and closed at 11,923.59 points with 71.117 million shares.
On Friday, the index gained 30.78 points and closed at 11,954.37 points with 66.957 million shares.
Yawar Uz Zaman, an analyst at Invest Capital and Securities, said that the market started with a slightly bearish tone but positivity was later restored as increased interest was witnessed on both foreign and local front.
The KSE-100 index breached the psychological level of 12,000 points on intraday basis, marking a week-on-week increase of 270 points (up by 2.31 percent) on the back of good corporate results and improved economic indicators.
He said that the current account showed a surplus of $99 million during the nine months of FY11 for the first time after seven years, while export was supported by textiles, which surged by 24 percent during this period to stand at $9.3 billion level.
S&P also downgraded long term outlook to negative on US sovereign rating, which further triggered flow of funds towards emerging economies.
With KSE-100 trading at much cheaper multiples compared to the region, increased flow of fund towards the region would likely improve investor interest in local market as well. Meanwhile, the 'cricket diplomacy' also started showing fruits as Bureau of Indian standards (BIS) renewed licenses of Pakistani cement exporters allowing them to export cement to India, which is expected to provide cushion to northern cement players amid lower domestic dispatches.
The average trading value during the week stood at $40 million, while average traded volumes were at 62 million shares.
Rabia Tariq at JS Global Capital believes the ongoing corporate result season was the primary reason behind the local bourse's performance this week.