A bullish trend was witnessed on the Karachi share market during the outgoing week ended on August 31, 2012 on the back of both local and foreign investors support. The benchmark KSE-100 index registered healthy increased of 352.40 points on week-on-week basis to close at 15,391.58 points, the highest level during last four years.
Trading activities however slightly reduced as the average daily volumes at ready counter declined by 6.9 percent on week-on-week basis to 250.24 million shares as compared to previous week's average of 268.65 million shares. Total market capitalisation increased by Rs 81 billion to Rs 3.919 trillion. The foreign investors were net buyers of shares worth $7.7 million during the week.
The market opened on strong positive note on Monday and the index increased by 132.48 points to close at 15,171.66 points with total volume of 269.258 million shares.
The positive trend continued on Tuesday and the index gained another 62.82 points to close at 15,234.48 points with 312.490 million shares. The investors on Wednesday opted for profit taking and the index lost 83.17 points to close at 15,151.31 points with 203.644 million shares.
On Thursday, the market once again witnessed positive trend and the index surged by 102.40 points to close at 15,253.71 points with 223.722 million shares.
Bullish trend continued on Friday.
"The investor sentiment at the local bourse remained buoyant with the KSE-100 index gaining 352 points to close at 15,392 level, up 2.3 percent on week-on-week basis", Naveed Tehsin, an analyst at JS Global Capital said.
On the macro front, he said, CPI for August clocked in at 9.05 percent on year-on-year basis. Other major highlights during the week included euphoria in the telecom sector related to the finalisation of ICH agreement, and tender for the import of 300,000 tons of urea. With June 2012 result season still ongoing, following are the key results announcements during the week.
He said the euphoria related to the finalisation of ICH agreement led to heightened interest in the telecom sector. PTC outperformed the market by 15.6 percent as investors disregarded the reservations of the Competition Commission of Pakistan (CCP).
According to the National Fertiliser Development Centre (NFDC) urea offtake declined by 19 percent on year-on-year basis while DAP dipped by 23 percent on year-on-year basis in July. Moreover, the government has reportedly issued a tender for the import of 300,000 tons of urea at $399/ton CFR, which may dent local urea offtake and the pricing power of local producers in the near term.
"Bullish sentiment remained prevalent throughout the week which was rounded off by release of better than expected August 2012 CPI that could keep the monetary easing cycle going (DR is at 10.5 percent)", an analyst at AKD Securities said. The Telecom sector was the major mover this week on the back of positive expectations regarding the implementation of the ICH mechanism. In this regard, PTC gained a robust 18 percent on week-on-week basis. Other gainers included ENGRO (+8.8 percent on gas supply optimism) and EFOODS (+5.5 percent). Laggards during the week included MEBL (-5.8 percent), AICL (-4.2 percent) and LOTPTA (-3.4 percent).
This week's volume leaders were PTC (cumulative 133 million shares), TELE and WTL - indicating the quantum of interest in the Telecom sector on the proposed ICH implementation.
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