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WEEKLY REVIEW: KSE witnesses positive trading week as index gains 69.49 pts

Staff Report

KARACHI: The Karachi stock market witnessed a bullish trading week due to the relaxation of the client level exposure rules at the market and positive expectations from the upcoming September result announcements.

The Karachi Stock Exchange (KSE) 100-share index gained 69.49 points or 0.7 percent to close at 9,838.12 points as compared to 9,768.63 points of the previous week.

Despite the spate of terrorists’ activities across the country during the past week investors remained bullish as international oil prices crossed $75 per barrel and global capital markets surged on US stocks’ Dow Index closing above 10,000 points.

The turnover was recorded at 241.95 million shares compared with 239.66 million shares of the previous week, reflecting an increase of 0.95 percent.

Other major factors that spurred the market’s activities included continued investor focus of attention on the bank sector mainly on the expectations of regulatory changes likely to allow the sector to generate liquidity through various relaxations.

“The market remained range-bound during the outgoing week as investors opted for a cautious stance on account of terror strikes and incongruity over the Kerry-Lugar bill,” said analyst at JS Research Mustafa Bilwani. “News regarding signing of the bill into a law after an explanatory statement by the US Congress should help ease economic concerns.”

After a satisfying visit by the Foreign Minister Shah Mahmood Qureshi, President Obama signed the bill into a law on Thursday. This came in after an explanatory statement by the US Congress stressing that the aid does not seek to impinge the country’s sovereignty, he said.

Fertilizer and E&P sectors were among the major performers this week, posting returns of 4.6 percent and 1.2 percent, respectively. Engro Chemicals’ CEO in an interview announced an ambitious expansion plan to invest $5 billion over the next five years renewing investor interest in the scrip and the sector. Moreover, discovery in Maramzai 1, where the country’s three major explorers have sizeable stakes helped fuel the rally in the oil sector. E&P and fertilizer sectors accounted for 9 percent and 7 percent of the total volumes during the outgoing week.

Foreigner’s remained on the buying side as they bought shares worth $25.7 million and sold shares valuing $23 million. Moreover, individuals too were net buyers of $7.2 million. Mutual funds and companies on the other hand remained on the selling side, as they offloaded shares worth $900,000 and $9 million respectively.

“Announcement by Pak Oilfields on production in Tal Block, expectations of early approval of leverage products by SECP, higher DAP sales for fertilizer sector and higher expectations from the discussion of IMF and the government on the 4th tranche of IMF’s assistance to Pakistan next month were the main reasons for the positive activity,” said analyst at Shahzad Chamdia Sec Ahsan Mehanti.

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