Stability in prices and bulls' dominance were the buzz word for the market movers where investors were in upbeat mood as they placed fresh deals in choice scrips on expectations that the banking, oil and gas scrips would perform well following their half-yearly financial results due soon. The KSE-100 share index closed at 6,968.46 points on Friday, against the close of 6,798.01 points of previous Friday--a surge of 170.45 points. Market capitalisation increased by 3.05 percent to Rs 1.925 trillion from Rs 1.868 trillion of the previous week. However, average daily turnover during last week fell by 28.16 percent to 452.5 million shares from 629.95 million shares traded on an average during previous week.
During the week the market had managed to touch the 7000 level, but had to struggle to maintain the level.
On Monday, bearish trend prevailed in the bourse. However, expectation of better results from Fauji Fertiliser and PPL helped the market to recover.
On Tuesday, the market remained positive on the back of some good results announced by Fauji. The banking sector shined under the lead of NBP and Askari Commercial Bank on the back of strong earnings expectations.
On Wednesday, oil sector gained momentum on the back of oil prices increase with PSO, Pakistan Oilfields, OGDC and PPL marching upwards.
On Friday, the market lost momentum on the back of a series of bomb explosions in Balochistan.
On the whole, the index remained in a bullish frame of mind. Pak Suzuki, MCB, Union Bank, Prime Commercial Bank and Bank of Punjab were major gainers, while Kohinoor Weaving, Pak Services, Wazir Ali Industries, Colgate-Palmolive and Atlas-Honda were major losers at KSE.
According to an analyst from KASB Equities, the major trigger for the market in the short term remains the upcoming result announcements by top market cap companies. The results, majority of which should be announced in the next two weeks, would stock-specific activity in the market. "While a positive surprise in earnings is likely to drive stock prices further up, any disappointments are likely to result in negative reaction. We, therefore, advise our investors to maintain a cautious trading strategy for the coming week. PSO is likely to see some activity on the back of half-yearly result announcements and privatisation related developments."
The major developments during last week, which helped share prices to consolidate, were: 14 expressions of interest received for PTCL; Central Board of Revenue slashed customs duty on pet coke, a by-product during the oil refining process, from 10 percent to 5 percent; Pak Suzuki Motors and Honda Atlas Cars increased prices by Rs 5,000 to Rs 15,000 and Rs 39,000 to Rs 40,000, respectively; and cement sales increased during the first seven months of the current fiscal year.
Market men said that the last couple of months high badla rates and investments have not been worrying the investors. Rather, selling pressure from institutions to book available profit and disturbing news from provinces, such as rocket and bomb blasts near gas pipelines, put immense pressure.
Though the share price of KESC, following its privatisation process, fell sharply on last session of the trading week, traders were of the opinion that investment commitment from the Saudi Group and its associate Siemens was a positive sign and assured investors that in the long run more investment, especially from the offshore counter, would park in the country.
The privatisation of PTCL and PSO is expected to get good response and ever-increasing rate of small investors and their active participation in government-backed scrips would help the index to stay over 6900 levels during the coming week. Analysts were of the opinion that as the investors had bought shares on higher levels; they would not allow the index to revert from the present levels. Correction of as much as 100 points may be in the offing but the upside is more likely, they added.