Bearish trend prevailed at the Karachi share market during the outgoing week ended November 2, 2007 in the backdrop of continuing domestic violence and political uncertainty in the country.
The benchmark KSE-100 index declined by 534.94 points on week-on-week basis to close at 13,915.04 points level on the end of the week. On the other hand, the KSE-30 index lost 510.18 points on weekly basis and finally settled at 16,873.79 points level.
The market witnessed dull trading activity and the average daily volume of ready market declined by 24 percent to 264 million shares as compared to 349 million shares of previous week. The average daily turnover of futures market decreased by 38 percent to 56 million shares against 90 million shares.
Market capitalisation declined by Rs 156 billion at Rs 4.242 trillion on the end of the week against Rs 4.398 trillion on the same day a week earlier. The SCRAs balances significantly surged by 22 percent ($54 million) on week-on-week basis to reach at $300 million on November 2.
On Monday, the market witnessed range-bound session due to law and order situation in the northern parts of the country and the KSE-100 index lost 56.50 points to close at 14,393.48 points level, while the KSE-30 index declined by 148.80 points and finally settled at 17,235.17 points level.
On Tuesday, the market witnessed heavy selling pressure and the KSE-100 index declined by 365.68 points to close at 14,027.80 points level on the back of panic selling due to exposure call on few brokers and law and order situation in different parts of the country. The KSE-30 index lost 436.33 points and finally settled at 16,798.84 points level.
On Wednesday, fresh buying was witnessed at the oversold market and the KSE-100 index recovered 291.62 points to close at 14,319.42 points level on the back of local and foreign investors interest coupled with institutional support. The KSE-30 index surged by 489.23 points to close at 17,288.07 points' level.
On Thursday, the market again witnessed heavy selling and the KSE-100 index declined by 389.50 points to close at 13,929.92 points level following rumours regarding imposition of emergency in the country and heightened concerns over deteriorating law and order, including suicide bomb blast near Sargodha's air base. The KSE-30 index lost 468.90 points to close at 16,819.17 points level.
On Friday, the market witnessed a highly volatile session with the index oscillating between 14,049.93 points intra-day high and 13,731.14 points low on the back of prevailing uncertainty on political front. Finally, the KSE-100 index settled at 13,915.04 points level, with a net loss of 14.88 points, while the KSE-30 index declined by 54.62 points to close at 16,873.79 points' level.
Usman Zahid at JS Global Capital said that politics once again stole the show as market remained fickle during the week due to surmises of the impending court decision, rumours of emergency being declared and suicide bombings happening in the country. Also, oil prices hit a high of $96 per barrel during the week on the back of declining US inventory, upcoming winter season, continuing Turk army and Kurd militants' tussle and looming sanctions over Iran. The corporate earnings of the first quarter FY08 depicted a mixed trend with banks and E&P showing decent growths, whereas Insurance and Cement sectors illustrated declines.
Major gainers in terms of market capitalisation during the week were Leather & Tanneries by 15 percent, Engineering by 9 percent and Food & Personal Care by 5 percent, while major losers were Automobile Assembler by -9 percent, Investment banks by -6 percent and Cement by -6 percent, Ayub Ansari at Invest Capital & Securities Limited said. Blue chip sectors namely Cement, E&P, Telecom, OMCs and Fertiliser roiled the market and declined by 6 percent, 5 percent, 5 percent, 2 percent and 0.4 percent respectively.
Farrah Marwat at KASB Securities said that it was a dismal week at the bourses where political uncertainty played fast and loose with the stock market. The KSE-100 index fell by 3.7 percent on week-on-week basis as rumours of emergency/martial law hit the market.
Uneasy law and order situation in the northern areas and a spate of bomb blasts did little to help market sentiment and average trading volumes dropped by -24 percent on weekly basis, as investors chose to stick to the sidelines sector, on the potential of Forced Sales Value (FSV) being drawn out over three years. UBL meanwhile received a battering this week, reporting below expected nine month 07 EPS of Rs 9, only 6 percent higher year-on-year on account of higher provisioning. Soaring oil prices in the international market, topping $92, and a resultant spike in furnace oil prices failed to ignite the E&P and OMC sectors against the grim political backdrop.