A bullish trend was witnessed on the Karachi share market during the outgoing week ended October 5 with investors anticipating another round of monetary easing by the State Bank of Pakistan (SBP). The benchmark KSE-100 index hit highest levels during the week and finally closed at 15,754.39 points, with a net gain of 309.57 points on week-on-week basis.
Trading activities also improved during the week as the average daily volumes at ready counter increased by 40.8 percent to 133.54 million shares as compared to previous week''s average of 94.87 million shares. Total market capitalisation increased by Rs78 billion to Rs3.976 trillion. The foreign investors'' interest continued and they remained net buyers of shares worth $12.2 million.
The market opened on strong positive note on Monday and the index increased by 115.12 points to close at 15,559.94 points with total volume of 135.801 million shares. The index gained another 88.35 points on Tuesday to close at 15,648.29 points with 140,793 million shares.
Bullish trend continued and the index on Wednesday closed at highest ever level of 15,712.21 points, up 63.92 points with 107.651 million shares. The market witnessed another bullish session on Thursday and the index closed at new highest level of 15,788.96 points, with a net gain of 76.75 points with 137.588 million shares.
On Friday the market opened on strong positive note and the index hit highest ever 15,840.33 points intra-day high level, however the investors opted for profit taking during the second half of the session and the index finally closed at 15,754.39 points, down 34.57 points with 145.848 million shares.
"The market sentiment at the local bourse remained positive throughout the week with investors anticipating another round of monetary easing by the State Bank of Pakistan (SBP)," Furqan Ayub, an analyst at JS Global Capital said. However, SBP opted to cut the rate by 50bps on Friday, against the market''s expectations of 75-100 basis points cut. Nevertheless excitement related to monetary easing did push the benchmark KSE-100 to its all time of 15,789 level this week.
He said surge of 41 percent in average volumes to 133 million shares also vindicated the market buoyancy. An analyst at AKD Securities said that the KSE-100 index closed the week at 15,754 points, up 2 percent as the market rallied on rate cut expectations. He said that the textile sector was in vogue during the week, amid a string of announcements, where textile companies generally surprised with above line payouts. Cement sector scrips also witnessed brisk activity as expectations of rate cut as well as soft coal price outlook generated interest in the sector. NML was the volume leader this week (41.4 million shares) followed by LPCL (36.3 million shares) and PTC (28.1 million shares). Top gainers list was headed by SNGP (+16.2 percent, on possibility of favourable regulatory development), NCL (+12 percent on above line dividend payout) and Shell (+11.9 percent). Laggards list was exclusively dominated by banks where the sector was under pressure due to margin compression concerns (discount rate cut) with MEBL (-3.3 percent), UBL (-3 percent) and MCB (-2.3 percent) recording the greatest fall.