Reviving local investors' interest supported the KSE-100 index to register an increase of 130.25 points to close at 12,476.77 points during the week ended on July 23, 2011. Foreign investors, however, were on selling side this week, marked by significant outflow of $22.3 million against last week's inflow of $2.35 million.
"It is interesting to note that this week's outflow includes only $2.64 million off-market trades against last week's inflow of $2.59 million, which indicates heavy sell-off through regular market", an analyst said. Trading improved significantly and the average daily volume at ready counter increased by 148.8 percent to 85.06 million shares as compared to previous week's 34.18 million shares.
Market capitalisation increased by Rs 39 billion to Rs 3.289 trillion. On Monday, the market witnessed mixed trend and the index closed at 12,318.24 points, down 28.28 points, with turnout of 57.341 million shares.
On Tuesday, the market witnessed increased participation of local investors and despite foreign selling the index increased by 125.30 points and closed at 12,443.54 points with 88.106 million shares. On Wednesday, the index witnessed a correction of 10.37 points and closed at 12,433.17 points with 83.251 million shares.
On Thursday, the index gained 41.60 points and closed at 12,474.77 points with 70.323 million shares.
On Friday, the index added 2.00 more points and closed the week at 12,476.77 points with improved volume of 126.254 million shares.
Yawar-uz-Zaman, an analyst at Invest Capital said that the market witnessed revived investors' confidence during the week, marked by a significant increase in average daily volume, mounting to 85 million shares. The recovery sentiment was largely on the back of current account surplus of $542 million in FY11 (after 7 years), while country's exports target surpassed by 31 percent to $25.29 billion in the same year. Moreover, betterment was seen on economic front, where US Congress rejected the proposal of cut in all Pak aid due to rising tension between the two countries post-Osama assassination. On the contrary, government's borrowing stroked a peak level of Rs 2.99 trillion. Meanwhile, the government is interested to float 2.5 percent of PPL share, which could generate $70 million. But excessive borrowing is still troublesome and haunts the country's growth prospects since it is mostly utilised for non-development activities.
Rabia Tariq at JS Global Capital said that the index increased by 1.1 percent on week-on-week basis on the back of alleviated political tensions after the Sindh Governor resumed office and the US Congress Panel rejected the proposal to end all aid to Pakistan.
The activity was witnessed in banking and fertilizer scrips in anticipation of strong corporate results in the upcoming week.
The key companies are scheduled to announce their quarterly earnings this week, mainly in banking and fertilizer sectors. As a result, scrip specific activities were witnessed in FFBL (up 1.1 percent) and NBP (up 3.4 percent). Moreover, cement scrips also remained in the limelight with LUCK and DGKC gaining 3.8 percent and 4.3 percent, respectively owing to expectation of strong earnings and rising retention prices.