RECORDER REVIEW
KARACHI: Inspired by the visit of Chinese President Xi Jinping that saw the two countries inking multiple agreements worth $ 46 billion, the Karachi equities rose by 1.6 percent, week-on-week (WoW), to close at 33,775.12 points.
The daily trading turnover also averaged 11 percent higher on 329 million shares.
While the sentiments of foreign investors remained positive with their net buying standing almost flat at $ 7.6 million compared to the preceding week ($ 7.4m). “Even though the index remained volatile during the week foreign investors remained sanguine,” said analysts.
The market, according to JS analyst Raheel Ashraf, sustained its positive momentum from last week as the visit of Chinese President caused to increase optimism over Pakistan macros.
The earnings announcement session, in which many stocks, especially banks, declared “better-than-expected” corporate results for 1Q2015, boosted investor sentiments.
Analyst Abdul Azeem observed volatility in the benchmark index amid future rollover and profit-taking in selected scrips.
The index remained range-bound during the week and faced pressure due to future rollover week and FBR’s concern over source of investment, he said.
Last was a future roll over week in which investors opted to chop their positions and book profits in the midst of recovering index, Azeem opined, adding the conversion of future contracts exerted significant downward pressure on the index dragging it down, sporadically.
The tense situation in the NA-246 by-polls in the city also pushed investors towards risk aversion and kept the index subdued.
The 16 percent, Year-on-Year, decline in textile exports also kept the sector in red and ultimately wielded downward force on index.
The NAB’s anti-tax-evaders suggestion to the FBR on the documentation of source of investment in the exchange transaction also was a major cause of concern for the market participants.
However, motivated by easing Yemen crisis and the visit of Chinese president, the investors took fresh positions.
Going forward, equity observers expect the market to feel the heat of what comes out of developments on fronts like Judicial Commission, Yemen crisis and political uncertainty in the country. Also, the easing inflation numbers are likely to pave the way for the central bank to slash the cost of bank borrowings, a trigger for the index particularly the leveraged stocks.
