Healthy activity on last trading session of the week ended on January 16, 2010 supported the KSE-100 index to close at 17-month high level of 9,923.14 points with a net gain of 146.93 points. "Foreign investors' strong interest was witnessed at the local equity market in some select stocks, and the index registered healthy gains on Friday", analysts said.
Trading however remained low during the week and the average daily volume at ready counter declined to 157.020 million shares, or 20 percent as compared to previous week's 195.904 million shares.
Market capitalisation increased by Rs 38 billion to Rs 2.850 trillion.
Foreign investors' interest continued with a net inflow of $6.9 million. Banks also remained net buyers of shares worth $4.5 million.
On Monday, the market opened on a positive note and the index hit 9,865.85 points intra-day high. However, profit taking in late hours minimised the gains and the index closed at 9,797.00 points with a gain of 20.79 points with volume of 178.320 million shares.
On Tuesday, investors opted for profit taking and the index lost 18.64 points to close at 9,778.36 points level with 111.543 million shares.
On Wednesday, the index gained 6.49 points to close at 9,784.85 points with 127.309 million.
On Thursday, the index managed to close above 9,800 level, at 9,802.45 points, with a gain of 17.60 points, with 163.105 million shares. On Friday, the market witnessed healthy trading on the back of foreign investors' support and the index increased by 120.69 points to close at 9,923.14 points with 204.825 million shares.
Sana Hanif, analyst at JS Global Capital, said that the index remained in the consolidation phase during the first four trading sessions and kept on testing the psychological mark of 9800. On the last trading day, however, a flurry of activity was observed in FFBL, PTC, PPL and NML propelling the market to a closing of 9,923 points - highest in 17 months. The rise in the index was also supported by healthy volumes of 205mn shares with foreigners remaining active in E&P scrips.
In its first quarter FY10 report, SBP appreciated the stabilising macroeconomic indicators and projected GDP growth to be in the range of 2.5-3.5 percent, CPI 10-12 percent, fiscal deficit 4.7-5.2 percent and C/A deficit 3.7-4.7 percent. The central bank also announced January 30 as the date for the next monetary policy statement, and with T-Bill yields falling by 3.78-13.76bps at the subsequent auction, a rate cut remains a strong possibility.
An overwhelming response to Fatima Fertiliser's Book Building (oversubscribed 4 times) had a spillover effect on other fertiliser stocks, causing a flurry of activity in the fertiliser sector. Expectation of improved earnings in the upcoming results amid better off-take was also a reason behind this rally. Additionally, investor interest was observed in E&Ps following the announcement of offshore drilling by PPL. Due to attractive multiples, investors also accumulated PTC shares which remained the volume leader during the week.
Muniba Saeed at Invest Capital Securities said that the investor activity at the KSE remained lethargic declining by 20 percent on weekly basis to a level of 157mn shares/day during the week. The volumes remained sluggish as investors awaited the result season to take fresh positions.
The index movement remained mostly volatile during the week. The market traded in a band of 227pts making a high of 9,970 points at which it closed on the last trading day. The week remained fairly eventful as the outcry from the energy sector to resolve the circular debt issue continuously made to the headlines. However on the positive side, the inflation figures December-09 standing at 10.52 percent left investors amazed (positively) hinting towards better economic conditions followed by a possible room for policy rate cut.