KARACHI : Despite uncertainties on political and security fronts, the share market continued its upward trend and the KSE-100 index registered a gain of 3 percent during the week ended on January 7, 2011. The index surged by 366.58 points and closed at 12,389.04 points from previous week’s 12,022.46 points.
Trading improved significantly on the back of continuous interest of both local and foreign investors and the institutions, and the average daily volume at ready counter increased by 33.8 percent to 155.01 million shares as compared to previous week’s 115.87 million shares.
Market capitalisation increased by Rs 84 billion to Rs 3.352 trillion. Foreign investors remained active with net buying of shares worth $11.895 million. On Monday, the market opened on a negative note due to prevailing political and security situation in the country and the index lost 173.00 points to close at 11,849.46 points with a low volume of 91.184 million shares. On Tuesday, on the back of revived interest of both local and foreign investors the index registered a massive gain of 260.80 points and closed at 12,110.26 points with a healthy volume of 219.563 million shares.
On Wednesday, the index gained 30.58 points to close at 12,140.84 points with 168.224 million shares. On Thursday, the market witnessed bullish session and the index increased by 182.63 points to close at 12,323.47 points with 144.294 million shares.
On Friday, the index gained 65.57 points to close the week at the level of 12,389.04 points with 151.762 million shares.
Mazhar A Sabir, an analyst at Invest Capital and Securities, said that after showing a robust growth of 28 percent on year-on-year basis in CY10, the KSE-100 index showed an appreciation of 3.0 percent on week-on-week basis to close at the level of 12,389 points.
“Despite the prevailing law and order situation in the country, mainly on account of assassination of the Governor of Punjab and uncertainty on political front, market continued its upward direction”, he said.
On Monday, the market took a dip on the fear of political instability amid government’s failure to keep its majority in the parliament. The index thereby touched week’s low of 11,850, tumbling by 173 points compared to previous day. However, anticipation of reconciliation on the political front, expectation of early launch of leverage product and increasing international oil prices, index gained 260 points on Tuesday and thereafter continued its bull-run.
Sana Hanif at JS Global Capital said that despite setbacks on the political and security front, such as MQM parting ways from the incumbent government, opposition giving government an ultimatum regarding reversal of oil prices as well as curbing corruption and assassination of the Punjab governor Salman Taseer, the KSE-100 index closed up 3 percent at 12,389 level. Oil discovery rumours and higher fertilizer prices helped the market to sustain last week’s positive momentum. Moreover, Moody’s maintained a ‘Stable’ rating for Pakistan, while highlighting prolonged economic and political crisis as key risks.
The oil and gas sector, particularly E&P stocks, outshined in the outgoing week on rumors of an oil discovery at the TAL black. POL and OGDC saw the highest weekly gains closing up 8.7 percent and 5.8 percent, respectively. Previous week’s news of urea price hike continued to have a positive impact on fertilizer stocks, notably on FFBL which gained 7.6 percent. Auto sector also outperformed the market as Ministry of Commerce withdrew notification on increase in age of imported cars – Brecorder