KSE witnesses bullish trend

Foreign fund managers' continuous interest and better expectations of March quarter results helped Karachi share market gain 1.7 percent during last week ending March 22, 2013. Overall, the capital market witnessed bullish trend during last week and the benchmark KSE-100 index gained 298.29 points to close 17,963.12 points from 17,664.83 points.
Analysts said timely announcement of assembly dissolution has restored investor interest as prevailing political uncertainty has reduced. Now the local as well as foreign investors are taking interest in the market activities, resulting in bullish trend during last week. They said that better expectations of March quarter results has also supported the equity market to grow and the same trend is likely to continue during next week.
"Despite delay in announcement of a caretaker Prime Minister that played on investor's nerves, bulls had their upper hand at the local bourse," said Naveed Tehsin an analyst at JS Global.
The KSE-100 index closed the week at the 17,963 level, a gain of 1.7 percent week on week with improved average daily turnover, he added.
The SBP directive to banks to pay a minimum 6 percent p.a. on average monthly balance, court decisions relating to International Clearing House (ICH) and LDI operators and decline in Pakistan's forex reserves to $12.4 billion were key highlights during last week, he added.
Trading activity improved during last week and with an increase of 7.1 percent, daily average traded volume surged to 185.98 million shares compared to 173.67 million shares traded during previous week. However, on WoW basis daily average value witnessed downward trend falling by 1.7 percent to Rs 5.97 billion from Rs 6.08 billion a week earlier.
During the period under review, total market capitalisation went up by 0.4 percent or Rs 19 billion to Rs 4.383 trillion from Rs 4.364 trillion a week earlier.
Out of five trading days of the week, on first trading day, the market witnessed negative trend while the remaining days, the market posted bullish trend. On Monday, Karachi Share Market witnessed bearish trend and benchmark KSE-100 index lost 172.83 points to close at 17,492 points down from 17,664.83 points.
On second trading day, bulls beat bears and market closed higher with a gain of 1.15 percent. KSE-100 index gained 201.37 points to close at 17,693.37 points. Led by cement sector, Karachi stock market on Wednesday witnessed positive trend and the benchmark KSE-100 gained 60.60 points to close at 17,753.97 points from 17,693.37 points.
On Thursday, the market closed on positive note and with an increase of 159.65 points, the benchmark KSE-100 index closed at 17913.62 points. Karachi stock market on Friday continued to show positive trend led by telecom and cement scrips on strong valuations. With an increase of 49.50 points, the benchmark KSE-100 surged to 17,963.12 points from 17,913.62 points a day earlier.
Commenting on the market, Samar Iqbal Senior Manager Equity Sales Topline Securities said that calmness on the political front and foreign fund managers' interest helped Karachi stock market to gain 1.7 percent during the last week.
"At the same time better expectations about quarterly results also helped the index to recover its early losses," she added. Average volumes however, meagerly increased by 7 percent, while banking sector witnessed major sell-off after State Bank's decision to provide min. 6 percent return to depositors' on average monthly balance as their profits will take a big hit, she said.
Telecom sector also witnessed selling pressure as investors trimmed their portfolio after the news that Supreme Court has suspended Sindh High Court's stay order against CCP hearing on international calling rates, Samar said. Renewed interest was seen in textile and oil stocks amid improved fundamentals. While better March quarter earnings expectations kept fertiliser and cement stocks on investors' radar, she said and added that AICL, PSMC and LPCL have already announced their December results during the week.
Going forward, Samar said, investors are eyeing smooth transition of the power to the caretaker set-up. Furthermore, in the coming week future position rollover will also take place.