Bullish trend persists

Karachi share market witnessed strong recovery during the week ended on May 16, 2014, supported by the MSCI review. The benchmark KSE-100 index climbed up by 389 points or 1.36 per cent to close at 28,883.33 points compared to 28,494.54 points a week earlier.
An analyst Samar Iqbal at Topline Securities said the market rallied by 1.36 per cent WoW after the MSCI review in which Pakistan weight increased by more than expectations. However, daily average volumes fell by 5.48 per cent to 133 million shares, while daily average trading value down by 3 per cent as investors remained cautious ahead of the monetary policy, she added.
"The Privatisation Commission started investor road shows for planned government offerings. HASCOL shares commenced trading on the exchange this week with a huge applause as it traded at a premium to the IPO price," Samar said.
KEL remained highly active during the week after inclusion in the MSCI FM index. Other stocks like PSO, LUCK, and PAKT were added while HUBC was deleted from the MSCI FM index, she mentioned.
Going forward, she said that the monetary policy announcement would be a key trigger for this week while the expectations of increase in reserves after the partial payment of 3G spectrum licenses would also be eyed. While investors would also remain skeptical of upcoming budget proposals specially related to changes in CGT, she mentioned.
Last week, bullish trend dominated at Karachi stock market, average daily value was declined by 3.07 per cent to Rs 5.98 billion compared to Rs 6.18 billion a week earlier. Average daily volume also fell by 5.48 per cent to 132.93 million shares against 140.64 million shares a week earlier.
Market capitalisation also increased by Rs 116 billion (WoW) to Rs 6.912 trillion against Rs 6.796 trillion end of previous week.
An analyst Adnan Heidar at Sherman Securities said that positive sentiments dominated primarily due to further inclusion of Pakistani companies into the benchmark MSCI Indices and overall increase in weightage. This let to small rally in local stocks as investors are expecting more foreign inflow going forward, he added.
K-Electric remained the highly traded stock during the week while the news of likely announcement of textile policy let to investor''s interest in textile sector, he said.
The weekly session begun with a negative growth and KSE-100 index closed at 28,343.88 points, fell by 150.66 points.
On Tuesday, Karachi share market managed to recover some points and KSE-100 index surged by 67.61 points or 0.24 per cent to close at 28,411.49 points.
On Wednesday, Karachi stock market remained closed on positive note, KSE-100 moved up by 116.70 points to close at 28,528.19 points.
Bullish trend ruled the KSE stock on Thursday. The KSE benchmark-100 mounted up by 314.83 points to close at 28,843.02 points. On Friday Karachi equity market remained stable to close at 28,883.33 points with a gain of 40.31 points.
An analyst Naveed Tehsin at JS global highlighted major news of the week. Finance Minister Ishaq Dar is expecting Foreign Exchange Reserves to cross US $15 billion by July this year. The government planning to introduce New Textile Policy and Cabinet Committee on Privatisation (CCoP) giving a go- ahead to the UBL privatisation deal, he added.
The MSCI increased Pakistan''s weight in the MSCI Frontier Market Index to 7 per cent upgrade of UAE and Qatar from the MSCI FM to MSCI EM. From Pakistan''s vantage points, the significant changes include upgrade of Pakistan State Oil and Lucky Cement from MSCI FM and inclusion of Pak Tobacco and K-Electric and deletion of Hub Power Company from MSCI FM. Moreover, the weight of MCB Bank oil and Gas Development Company increased to 1.4 per cent and 1.5 per cent from 0.9 per cent and 1 per cent respectively, Naveed mentioned.