The Karachi share market witnessed bearish trend during the outgoing week ended January 13, 2012 due to uncertainty on political front and the KSE-100 index declined by 110.89 points on week-on-week basis to close at the level of 11,014.46 points.
Trading activities at the ready counter also remained extremely low due to absence of investors and the average daily volumes declined by 33.3 percent to stand at 28.13 million shares, as compared to previous week''s average of 42.21 million shares.
Total market capitalisation declined by Rs 27 billion on week-on-week basis to Rs 2.866 trillion. However, the foreign investors remained net buyers of shares worth $0.18 million during the week as compared to an outflow of $6.7 million recorded in the previous week.
The market witnessed negative trend during the first four sessions and the index lost 21623 points. However, the index recovered 105.34 points on Friday that minimised the week-on-week losses.
The market opened under pressure on Monday and the index declined by 85.04 points to close at 11,040.31 level with total volume of 20.914 million shares. This trend continued on Tuesday and the index lost another 107.13 points to close at 10,933.18 level with 43.524 million shares. The index on Wednesday closed at 10,930.49 points, down 2.69 points with 23.057 million shares. The market on Thursday witnessed another bearish session and the index declined by 21.37 points to close at 10,909.12 points with 21.120 million shares.
On Friday, the market took upward trend on the back of investors interest on dips and the index recovered 105.34 points and closed the week at 11,014.46 points with 32.057 million shares.
Yawar Uz Zaman, an analyst at InvestCap said that the index saw another volatile week on account of stressful environment on country''s political front. "The political uncertainty prevailing on the local front kept investors at bay from the market, especially when Supreme Court in its judgement pointed out present political setup''s highest commands as dishonest. Meanwhile, the condition became worst when the government and country''s military confronted on certain issues", he said.
As a result, the index also broke the psychological level of 11,000 points; the investors immediately sidelined themselves, as another military coup was immediately feared to take place. However, last day of trading showed some positivity where the market gained 105 points and closed the week back above 11,000 level, primarily due to SECP''s investment-friendly proposal to FBR with respect to capital gains tax (new collection mechanism with amnesty scheme), reduction in corporate tax rate and increase in tax on national saving schemes.
Furqan Ayub at JS Global Capital said that the local bourse remained lacklustre owing to the political uncertainty prevailing in the country. On the macro front, swelling of trade deficit also dampened the investor sentiment. On a positive note, inauguration of Kunnar-Pasakhi Gas Pipeline Project by the prime minister created some excitement for investors.
He said that the dullness in market activity could be vindicated by 33 percent drop in volumes to 28 million shares. This tamed performance led to the market underperforming the regional markets by 3 percent.
He said FFC and FFBL raised urea prices this week, consequently outperforming the market by 5 percent and 4 percent, respectively. Amongst other blue chip stocks, MCB and LUCK outperformed the market by a respective 3 percent and 2 percent on the back of attractive valuations.