Opening bearish at 33,946 points on Monday, the KSE 100 index saw, what equity analysts observed, mixed investor sentiments last week. Amid bleak corporate earnings outlook, the investors were opting for profit taking during the corporate earnings session.
The benchmark KSE-100 index on Friday closed up 0.1 percent, Week-on-Week, at 33,993 points. The daily average trading volumes declined by 22 percent to 212 million shares.
The market participants were cautious due to increased net foreign selling, said analysts. The inflow of net portfolio investment accumulated to $9.33 million compared to $10.48 million outflows.
Coupled with thin payouts, growing coal prices on international market pressured the cement sector. Raheel Ashraf of JS Research said higher-than-expected result announcement by DG Khan Cement (DGKC) prompted fresh buying into the cement sector. "However, news of potential expansion by the DGKC cut short investors'' optimism," he said.
ENGRO remained in the limelight, announcing better-than-expected 2014 earnings and intention to sell its EXIMP business to Engro Fertilizer (EFERT).
Other key highlights of the week were Pakistan finalising $21 billion LNG deal with Qatar, State Bank revising down FY15 inflation target to 4.5-5.5 percent from initial target of 8 percent, Ogra asking the government to approve increase in gas tariff to save gas utilities from collapse, foreign exchange reserves rising to $16.04 billion and federal minister hinting at discontinuation of subsidised sale of power to K-Electric (KEL).
According to analyst Abdul Azeem, a 1.4 percent decrease in inflow of Foreign Direct Investment (FDI) to $545 million during July-January FY15 proved to be a catalyst for the initial bearish trend.
"The dip in foreign inflows was due to political uncertainty, increasing terrorist activities and deteriorating law and order situation," he said.
The Current Account deficit shrank by $230 million in July-January compared to the same seven-month period of the preceding fiscal year, when it was $2.5 billion.
"Even though the figure showed a decrease in the Current Account gap, it is pertinent to mention that exports are decreasing while imports are still growing," Azeem said.
The market sentiments changed in the week''s later part when reports of finalisation of the much-awaited LNG deal with Qatar surfaced.
The weekly price sensitive indicator also decreased and played an important role in lifting the market''s spirit.
Going forward, the analysts maintain a positive outlook for the volatile Karachi bourse.
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