RECORDER REVIEW
KARACHI: After two consecutive optimistic weeks, the Karachi share market witnessed negative sentiments during the last week ended on Sept 19, 2014 amid uncertainty on political and economic front.
The benchmark KSE-100 index shed 29 points (WoW) to close at 30,016 points end of the week compared to 30,045 points a week earlier. However, average traded volumes at the KSE surged by 25 per cent WoW as investors preferred to book profit.
An analyst at KASB said that volatility persisted in the market with the investors looking to book profits for larger part of the week. Lack of positive news flow amid floods and political impasse kept buyers and sellers on equal footing. However, the index managed to sustain its 30,000 level.
“Floods remained the cause of concern this week with the damage to cultivable land rising to 2.3 million acres, as per the latest data. While, politics remained in the back seat with a little movement in the stance of political parties,” he added.
He said that the index heavyweight, OGDC, (down 5.2%WoW) was under pressure with the CCOP approving divestment of 10 per cent of Government of Pakistan’s holding.
“Lucky Cement (up 5.9%WoW) revised its investment strategy regarding the coal-power project by deciding to take up 100 per cent equity stake in it, compared to 75 per cent earlier, exhibiting increased focus of the company on diversification projects,” he added.
In other news, the IFC has agreed with BAFL to invest 15 per cent in the equity of the bank, thus issuing 238 million shares at Rs28 per share. Moreover, with the government’s planning to appeal the verdict of Supreme Court over the GIDC, it seems that the GIDC saga is far from over. Circular debt woes kept the PSO in the limelight with its receivables mounting up to Rs210 billion, with Rs186 billion owed by the IPPs, he mentioned.
Commenting about the market outlook, he said that a clarity over political uncertainty, commodity prices and impact of floods will remain key drivers of market direction going forward, he added.
Despite of negative sentiments, average daily value witnessed an upward trend and surged by 11 per cent to Rs 7.76 billion compared to Rs 7 billion a week earlier. Average daily volume also increased by 25.3 per cent to 164 million shares during the last week against 131 million shares a week earlier. However, the market capitalisation registered a Rs 16.57 billion decline to reach Rs 6.998 trillion down from Rs 7.0144 trillion.
Foreign inflows continued to support the market and clocked in at $13.2 million, down 29 per cent WoW.
“After the bullish momentum of the last two weeks, the market took a breather this week with the KSE-100 index staying flat (slightly declined by -0.1 per cent WoW),” an analyst at JS said.
Prevailing political impasse, mixed corporate results and wait and see approach of the investor community ahead of State Bank of Pakistan’s (SBP) Monetary Policy Statement (MPS) resulted in the benchmark index staying in a tight range, he added.
Other news on domestic shores was underwhelming where Finance Minster hinted at a delay in the fourth IMF installment, cotton arrivals reached 2.75 million bales till Sept 15, 2014, up 4.73 per cent YoY, the CCoP approving the OGDC transaction structure and foreign exchange reserves rising by $110mn from last week to $13.525 billion, he said.
Among five trading session, the market remained negative for the last three days, while initial two sessions share market was on upward side.
The Karachi share market on Monday closed higher led by cement and banking sector stocks on strong valuation and the benchmark KSE-100 index slightly up by 25 points to close at 30,070 points compared to 30,045 on Friday.
Sentiments at the Karachi share market on Tuesday stayed bullish led by investors’ interest in selected stocks and market gained another 110 points to close at 30,180.
On Wednesday, a volatile session was witnessed at the Karachi Stock Exchange (KSE) and the benchmark KSE-100 index declined by 44 points to close at 30,137 points.
The Karachi share market continued to post a negative trend on Thursday as investors booked profits in select stocks across the board on prevailing political uncertainty and the benchmark index lost another 42 points Thursday to close at 30,094 points.
Sentiments at the Karachi share market were remained negative on last trading day and the benchmark KSE-100 index lost 78 points to close at 30,016 points Friday.
