The share market depicted firmness on the grounds of good corporate results, foreign brokerage houses' positive reports Pakistan's economic outlook, particularly the capital market, enabling the index to improve by 0.87 percent with a steady volume of transactions, during the past week.
Trading began with a positive note in the week under review, but later, backed by corporate results and various other positive factors, the situation turned better with cements, banks and petroleum shares receiving fresh buying.
According to stock analysts, an important factor that kept the market stable was foreign funds' buying interest, however, activity remained range-bound. The LSE-25 index closed at 4,545.84 points as compared to 4,506.21, surging by 39.63 points, during the past week. Turnover remained almost flat at 38.364 million shares as against 38.462 million shares. Analysts pointed out that corporate earning reports are encouraging, therefore, activity is likely to pick up in the coming sessions.
With cement, oil and banking sectors having undergone heavy selling pressure, share prices dipped on first day of the week under review while the benchmark index shed one percent. The LSE-25 index ended at 4,461.67 points as against its previous closing of 4,506.21, losing 44.54 points. Turnover also significantly came down to 25.750 million shares from 38.462 million, depicting a fall of 12.711 million shares.
The market showed negative vibes and remained in minus zone most of time, with cement sectors receiving heavy selling pressure. Oil sector and key banks also stayed depressed while Adamjee Insurance and Nishat Mills were the major losers. Bullish trend prevailed on the second day where equities recorded earlier losses, following fresh buying in banks, triggered by the news of pre-bid meeting of NIT and Barelays agreement with ABN Amro.
On the third day, a volatile movement was observed with profit-taking continuing throughout the day. With a marginal improvement of 8.46 points, the LSE-25 index ended at 4,520.14 points as against 4,511.68. Overall turnover improved to 47.643 million shares from 32.556 million, registering a surge of 15.087 million shares.
The market showed a mixed trend with heavy profit taking in almost all scrips, including petroleum, banks and fertilisers. Arif Habib Securities and UBL made fresh gains whereas Adamjee Insurance and Pakistan Oilfields appeared as key losers.
Trade activity was range-bound on Thursday, however, on account of good earnings reports of cement sectors, buying surfaced at eleventh hour, paving way for a positive closing of the market. The LSE-25 index, with an improvement of 15.81 points, ended at 4,535.95 as compared to 4,520.14 points of the past session. Volume, however, declined by 10.444 million shares, retreating to 37.199 million from 47.643 million shares. Early half of the session was quite depressing and the market moved in a very tight band, lacking support form genuine buyers. However, later the situation changed with positive earning reports of exploration, banking and cement sectors.
Share values also moved in a tight range with a slight improvement in turnover but interest in selective scrips remained intact, which helped the market close in positive zone, on last trading day of week. The LSE-25 index was marginally up by 9.89 points to 4,545.84 from 4,535.95 points. Volume, with a surge of 1.165 million shares, totalled 38.364 million compared with 37.199 million shares, traded a day earlier.
The market maintained the bullish tendency on account of buying interest in Adamjee Insurance and fertilisers. Foreign buying interest also played a role in keeping the sentiment bullish.
The market stayed stable in the entire week even ignoring the factor of increase in CFS amount, an analyst said. As described by him, the main reason for this stability was increase in foreign investment in terms of Scra, which reached US $705 million mark. In addition to this, foreign brokerage houses reports about economic outlook of Pakistan and quarterly earnings of corporate sector also were the supporting factors.
According to a report released by J. P Morgan, KSE index could touch 14,000 mark in 2007, he said. Likewise, another report released by Merry Lynch claimed that growing inflow of foreign investment and remittances would undo the negative impact of trade deficit and current account deficit of Pakistan. It predicted due to foreign investment there would be no liquidity crunch in the market, he said. He advised the market players that they should not be misled by the fluctuations in indices and invest in merit-based shares.