The Karachi Stock Exchange (KSE) witnessed a bearish trend during the last week ended on March 8, 2013 due to worrisome security situation in the city and investors' profit-taking attitude. Overall the benchmark KSE-100 index lost 221 points to close below the psychological level of 18,000 points with low trading volume.
KSE-100 index closed at 17,964.18 points during the last week from 18,185.19 points a week earlier. Analysts said that after a bull run of seven weeks, bears returned to the local bourse market, which has down by 1.2 percent on weekly basis amid deteriorating law and order situation of the city.
Worrisome security situation in the city, profit taking in index heavy weights OGDC and MCB and selling in telecom stocks were the main factors that let the bears lead during the week, they added.
"Fall in heavy weight scrips like OGDC and MCB share prices pushed index below 18,000 points mark. While adverse news flows in telecom sector about CCP hearing on March 12 and reduced termination call rate from US forced investors to trim their positions in the sector," said Samar Iqbal, senior manager equity sales Topline Securities.
However, she said, fresh buying was seen in refinery sector along with LOTPTA and Engro Corp amid hope that ECC may give favourable decisions, adding that anticipation of increase in cement prices also grabbed the investor attention in the respective stocks. Going forward, she said that law and order situation and unfolding political scenario might keep market volatile during that week.
Week on Week (WoW) basis daily average value witnessed downward trend and fell by 21.4 percent to Rs 7.07 billion from Rs 8.99 billion a week earlier. Trading activity was remained dull during the week and with a decline of 27.02 percent, daily average traded volume has decreased to 236 million shares as compared to 324 million shares traded during the previous week.
During the period under review, total market capitalisation has also registered a decline of one percent or Rs 44.3 billion to Rs 4.462 trillion from Rs 4.506 trillion a week earlier.
During the five trading days of the week, market was continuously on negative side and on the first trading day of the week on Monday, Karachi Stock market ended lower and KSE-100 closed at 18,126.77 points, down by 58.42 points.
On Tuesday, the bearish trend continued and benchmark KSE-100 declined by 73.45 points to close at 18,053.32 points.
KSE-100 lost 52.87 points on Wednesday and it declined by 18,000.45 points. On Thursday, the stock market closed on bearish note and KSE-100 was down by 7.54 points to close 17,992.91 points.
The Karachi Stock market also ended lower on Friday amid institutional profit taking in stocks across the board led by telecoms stocks, and the benchmark KSE-100 index lost 28.73 points to close at 17,964.18 points from 17,992.91 points.
"Investors were kept on their toes throughout the week as an uncertain law and order situation coupled with sector specific regularity issues dictated sentiment at the KSE," said Furqan Ayub an analyst at JS.
Ambiguity on various fronts led KSE-100 index to close at 17,964 level, down by 1.2 percent WoW, while low investor confidence also reflected in trading volumes which plunged by 27 percent WoW, however foreigners were still net buyers of US $4.4 million last week.
He said some $380 million decline in forex reserves and 2-9 basis points increase in T-bill cut-off yields were key macro highlights of the week.
For listed sectors and stocks, cement sales surged by five percent YoY in February-2013, while ATRL and LOTPTA outperformed the market by 14.2 percent and 4.9 percent respectively in anticipation of positive regulatory changes.
On the other hand, PTC underperformed the market by 9.8 percent WoW on news of US based Federal Communication Commission's order prohibiting US telecom companies from paying above the Pre ICH rate (US $0.02/min) for calls to Pakistan, Furqan said.
Engro was a star performer at the close of the week as rumours abounded that the company could be getting gas at a much lower rate ($1.05-1.70/mmbtu) than earlier expected rate of $5/mmbtu, he mentioned.