The investors were happy on Wednesday after no-confidence move against Prime Minister Shaukat Aziz was rejected by NA, ensuring continuity of reforms and bringing the much-needed investment in local stock market.
The KSE-100 Index closed at 10,086 levels, up 143 points, from 9,943 level, recorded on Tuesday. The volume in the ready market rose to 223 million shares against 169 million shares. The volume in futures market also increased to 47 million shares against 36 million shares of Tuesday.
It was third consecutive day of the week that market managed to close on a positive note. The market opened 55 points up, at 9,998 level, and throughout the day bullish trend was observed. The main reason behind the bull-run was failure of no-confidence motion initiated by opposition parties against the Prime Minister.
Near the end of the trading session, profit taking was witnessed, mainly in National Bank of Pakistan, OGDCL and Pakistan Oilfields.
Prime Minister Shaukat Aziz survived the no-confidence vote move against him in the National Assembly after a discoloured opposition onslaught with charges of misconduct that the PM rejected as false. As the ''no-confidence saga'' came to an end, the market re-couped positive sentiment.
Banking sector was again in the limelight as the sector''s overall profitability outperformed the market. Expectations were that earnings stream could potentially grow by 25-35 percent in CY06, which would keep the investors on the hunt. Stocks that were sledgehammered in past sessions were finally on their feet as OGDC, PPL, POL, PSO, Lucky and DGKC all posted intra-day gains and closed slightly below their day''s VWAP.
''''We are of the opinion that as some of the political issues have been resolved, the market might potentially test 10500 level, or above. So, the strategy should be to sell at strength, and wait for broader correction to re-enter", an analyst said.
An analyst from Atlas Capital said that the market witnessed rising trend throughout the day, which was attributable to the settlement of the issues on the political front as well as the extension of CFS till end of December, which resulted in revival of investors'' confidence. Higher volumes also reflected improvement in investors'' sentiment. After touching intra-day high of 10176, the market finally managed to close at 10086, up by 143 points from previous day''s closing.
Notice from SECP was released about inception of KSE-30 index from September 1, in which MCB will have the highest weightage. An analyst from Elixir Securities said that E&P and banking sectors were top performers, as interest in second-tier stocks also came in later in the session.
Suspension of the Board of Directors of Crescent Standard Investment Bank by SECP created a negative impact on BoP and it remained under pressure as it holds a TFC of Rs 198 million of CSIBL. There were lot of sureties given regarding concerns in the market that the regulators may not be able to implement the new financing mechanism--CFS MK II--on time, but all that ended in a fiasco. This new product has again been delayed till December. Taken positively by investors, this news, quite surprisingly, created bullish sentiment, as investors seemed gratified by continuity of the current mechanism. "We, however, believe that an increase in volumes and growing support in the E&P and banking sectors shall help the market to sustain the current levels."