Investment in CFS (continued funding system) rose sharply last week, which indicated that interest from retail investor was gradually and steadily improving where rate witnessed marginal drop.
CFS financing increased from Rs 20 billion on previous Friday (July 7) to Rs 22.5 billion at the end of the last week (July 14). This can be contributed to the rise in equity prices through the week. Moreover, the rate of CFS also declined marginally from 13 percent to 12.7 percent through the week.
Activity at the futures counter was quite dull following its third consecutive week ending July 14, which was evident from the relatively low average trading volumes at 40 million against previous week's 43 million and open interest of Rs 7.5 billion against previous week's Rs 7.14 billion.
Futures spreads also remained meagre at 7.06 percent, which showed that sentiment of investors was still fragile due to heightened volatility that had become the hallmark of KSE in the past few weeks.
In the next few weeks, announcements of corporate results would start coming, which is expected to derive the market sentiment. It is expected that three main sectors--banks, E&P and cement--would post average profitability growth ie in the range of 55-75 percent.
As per the latest position of SCRAs (Special Convertible Rupee Accounts), a net positive inflow of $14.6 million was recorded in the first 13 days of FY07. In FY06, total net inflow of $358 million was recorded into the local bourse, which was more than double of the net inflow of $153 million recorded in FY05.