The Karachi share market witnessed a bullish trend during the outgoing week that ended on March 30, 2012 and the benchmark KSE-100 index increased by 488.47 points or 3.68 percent on week-on-week basis and closed at 13,761.76 points.
Trading activities also improved significantly due to aggressive participation of local investors as the average daily volumes at ready counter increased by 47.6 percent to 367.91 million shares as compared to previous week''s average of 249.18 million shares.
Total market capitalisation increased by Rs 126 billion to Rs 3.528 trillion. The foreign investors emerged net sellers of shares worth $7.7 million during the week as compared to net inflow of $2.9 million during last week.
The market witnessed a mixed trend on Monday however managed to close in positive zone at 13,286.73 points, up 13.44 points with total volume of 278.010 million shares. On Tuesday, the market witnessed bullish trend and the index surged by 163.00 points to close at 13,449.73 points with 352.783 million shares. Bullish trend continued on Wednesday and the index gained another 125.68 points to close at 13,575.41 points with 450.238 million shares.
However, the investors opted for profit taking on Thursday and the index lost 16.31 points to close at 13,559.10 points with 344.578 million shares. On the back of reviving interest of local investors, the index on Friday increased by 202.66 point and closed the week at 13,761.76 points with 413.941 million shares. "The investor''s interest remained skewed towards the low tier scrips while total traded value increased by 49 percent to stand at $84 million during the week", Hasan Raza, an analyst at InvestCap said.
He said that the news of nine IPPs serving the default notices to government for non-payment of Rs 42 billion raised the risk on sovereign ratings of the country however stake sell-off by National Power International Holding of Hubco also brought local interest in power sector. Decline in banking sector spreads to 7.3 percent on month-on-month basis during February 2012 and developments towards demutualisation of exchange after parliament approval also kept the interest in market.
During the quarter ended March 31, 2011, issue of implementation of reformed CGT regime brought the life into the market as index gained 2,414 points, up 21.3 percent while average daily volumes once exceeded the six year high of 576 million shares, with market capitalisation increasing by Rs 598 billion to Rs 3,528 billion.
Meanwhile, aggressive tax collection on fiscal side exceeding Rs 1,122 billion, up 28 percent on year-on-year basis during July-February 2012 and efforts of the government to reinitiate the privatisation program through finalising the SPO of PPL also supported the investor''s confidence in the market. However, CGT remained the tempting issue as no date has been set till yet for the implementation of the regime, while the auction of 3G licenses has also been delayed.
Naveed Tehsin at JS Global Capital said that the market continued with its bullish sentiment and index increased by 3.7 percent on week-on-week basis disregarding the news flows pertaining to delay in implementation of revised Capital Gains Tax (CGT) regime which will not be applicable from April 1, 2012.
Moreover, the joint sitting of the parliament passed the bill on corporatisation, demutualisation and integration of stock exchange during the week. Other important news during the week included National Power
International Holding (NPIH) offloading shares of HUBC, figures of lower fertiliser offtake during February and rise in cement prices. Overall investors interest remained upbeat that can also be vindicated by average daily volumes that surged by 47.6 percent.