KSE gains 221.75 points

Karachi share market observed a positive trend during the last week ended on June 13, 2014. The successful government offering of the UBL and World Bank loan for the Dasu Dam construction supported share market to gain 221.75 points. However, sentiments were affected due to the Karachi airport attack. With an increase of 0.8 per cent, the benchmark KSE-100 index closed at 29,730.86 points, up from 29,509.11 points a week earlier.
Farhan Mehmood, Head of Research at Sherman Securities, said that during the last week, the KSE-100 posted gain 1 per cent to 29,730 points. Despite the concerns on law and order situation in Karachi, the successful offloading of the UBL's shares to local and foreign investors brought an excitement in the market.
However, the budget related uncertainties continued to dampen the market turnover as average daily volume during the week remained low, he added.
Samar Iqbal, AVP at Topline Securities, said, "After the MQM ended protests, healthy foreign buying, the successful government offering of the UBL, and World Bank loan for the Dasu Dam construction triggered the share market to gain 0.75 per cent on WoW basis. However, sentiments were affected due to the Karachi airport attack, she added.
Mari announced higher-than-expected production estimates from Ghauri field which brought a renewed interest in MARI and PPL. Textile sector also remained in limelight in anticipation of favourable textile policy, she informed.
Samar added that news about the government transferring lands to the PTCL management also helped the stock to post gains during the week.
Going forward, she added that road shows for the next government offering and the parliament discussions on budgetary measures would be eyed.
Average daily value declined by 23.9 per cent to Rs 10.08 billion during the last week compared to Rs 13.24 billion a week earlier. Average daily volume also dropped by 17.5 per cent to 215.623 million shares against 261.378 million shares during the previous week. However, the market capitalisation surged by Rs 6.0 billion to Rs 7.054 trillion up from Rs 6.994 trillion.
Furqan Ayub, an analyst at JS Global, opined about the market, "Despite deterioration in the law and order situation of the city, the celebratory mood at the local bourse was evident as Pakistan completed its first privatisation deal in eight years via a secondary market offering of the UBL."
Meanwhile, further impetus to market sentiment was on account of sector/stock specific news like the Pakistan's government nearing a resolution to the property dispute with Etisalat (PTCL outperformed the market by 4.1 per cent WoW. The World Bank's approving the Dasu Dam project is positive for cements and agreeing to give a loan of US $700 million, he informed.
The market liquidity on the other hand was lower compared to last week as average volumes traded during the week dipped by 18 per cent WoW to 215.62 million shares, he added.
On the macro front, Furqan said that Pakistan's trade deficit shrank by 5.66 per cent YoY in 11MFY14 and foreign exchange reserves rose by US $17.5 million to US $13.457 billion.
The Karachi stock market posted a negative trend on Monday and the benchmark KSE-100 index lost 36.59 points to close at 29,472.52 points on a previous day.
On Tuesday, the market inched up to close at 29,540.72 points up by 68.20 points.
A bullish trend ruled the Wednesday market and the KSE-100 surged 242.58 points to close at 29,783.30 points.
On Thursday, the equities unlike two previous days recorded a negative trend and the benchmark KSE-100 index declined by 16.92 points to close at 29,766.38 points.
On Friday, the market remained on a negative note and the KSE-100 shed further 35.52 points to close at 29,730.86 points.
An analyst at the BMA Capital said that the E&P's inability to rally even against a back drop of rising international oil prices is a concern as this is a sector with the capacity to drive the market higher. Banks have seen a good activity this week which needs to continue next week to keep higher levels in focus, he added.