Heavy buying was witnessed at the Karachi share market and the benchmark KSE-100 index surged by 9.3 percent during the week ended April 03, 2009 on the back of lowering National Saving Schemes rates and fresh foreign inflows from IMF and the World Bank. The index increased by 629.42 points and closed at 7,432.88 points level due to strong interest of retail investors and local institutions.
Both the retail investors and local institutions remained active and took fresh positions, analysts said and added that the fertiliser and cement sectors in particular outperformed during the week. Trading activity further improved as the average daily volumes at ready counter increased by 18 percent to 294.569 million shares as compared to previous weeks average of 249.564 million shares.
The overall market capitalisation increased by Rs 192 billion to Rs 2.235 trillion. Though selling pressure from offshore investors eased off slightly, foreigners still remained net sellers of $7.5 million during the week. They bought shares worth $14.2 million while shares amounting $21.7 were offloaded during the week.
The market opened on a strong positive note and the index witnessed healthy increase of 211.35 points to close at 7,014.81 points with a volume of 330.189 million shares on Monday. However, the market witnessed a correction of 154.59 points on Tuesday and index closed at 6,860.22 points with 314.266 million shares.
On Wednesday the market once again took upward trend and the index gained 71.68 points to close at 6931.90 points level with 207.282 million shares. The bullish trend continued and the index surged by 259.19 points to close at 7,191.09 points level with 290.948 million shares on Thursday. The market witnessed another bullish session on Friday and the index gained another 241.79 points and finally closed at 7432.88 points with 330.158 million shares.
Atif Zafar, an analyst at JS Global Capital Limited said that the market, which was up by 54 percent from the years lowest level on January 26 was cheered up by positive developments including receipt of second tranche of $847 million form IMF and $500 million from World Bank. Moreover, reduced National Saving Schemes rates and political reconciliation amongst major parties resulted in healthy volumes.
He said that the index, which is up 9.3 percent, outperformed the regional markets in the outgoing week. In comparison to KSE, regional markets such as Shanghai, Hang Seng, Sensex30 and Nikkei were up in rang of 1-3 percent.
He said that fertiliser and cement sectors market capitalisation were up by 20 percent and 13 percent respectively as against 9.2 percent rise in the total market capitalisation. Fertiliser sector rose on the back of attractive dividend yields while cement sector was boosted by declining cost pressures.
Muniba Saeed at Invest Capital and Securities said that the investors interest remained highly stimulated at the KSE with average daily volumes increasing by 18 percent on weekly basis.
She said that the week remained highly eventful with the circular debt issue finally being pacified upon the issue of TFCs by the government of Pakistan. However, concerns still remain regarding the governments ability to raise the remaining amount required to completely settle the issue. On the external front, the achievement of the March 09 targets set by IMF as well as the approval of $847 million kept the investment climate pleasant as liquidity was injected in the countrys balance sheet. Further positivity was injected as the Supreme Court of Pakistan reinstated the Punjab government.