Karachi bourse rises above 9,000 points

Sunday, November 15, 2009
By Salman Siddiqui

KARACHI: Despite considerable foreign selling on the Karachi bourse, the market managed to recover from deep red and was restored above the psychological level of 9,000 points this week.

The KSE 100-share Index rose 130.69 points or 1.46 per cent and on weekly basis and closed at 9,067.17 points. The parallel running junior 30-Index increased 165.89 points or 1.76 per cent and concluded at 9,562.33 points on week-on-week basis.

Analysts said that the likely positive outlook on cash flow into the country from International Monetary Fund (IMF) and Friends of Democratic Pakistan (FoDP) in near future convinced local financial institutions to build positions. They mainly accumulated stocks in securities (investment), energy, bank, refinery, textile, chemical, and telecommunication sectors.

Pakistan was reportedly set to receive $1.2 billion from IMF as fourth tranche of institution to the country under standby loan program and $1.8 billion from FoDP shortly. IMF has also talked to donor countries to make sure that they were giving around $2.0 billion in the on going year, while Saudi Arabia gave $380 million in loan, analysts cited.

Besides, home remittances continue to show a rising trend as an amount of $3.09 billion was received in the first four months of the current fiscal. This represents an increase of $743.78 million or 31.70 per cent on yearly basis. This rising trends in remittances was making its part in paining the local economy green and reflecting at the bourse, they added.

The maintaining of Pakistan into its Frontier Markets by Morgan Stanley Capital International Inc. (MSCI) and approval of financing product i.e. Margin Financing by the Securities & Exchange Commission of Pakistan (SECP) were the other two expected development, but they played neutral this week.

The mutual funds, companies and non-banking finance companies were the three major buyers at the bourse this week. They respectively injected $5.79 million, $5.08 million and $1.81 million, according to NCCPL.

Under the lead of overseas investors, who divested $7.50 million in the outgoing week, local individual investors and banks/development financial institutions appeared as aggregated sellers of share worth $3.41 million and $1.89 million, respectively.

The other buying triggers this week were the easing of CPI inflation into single digit at 8.87 per cent after 22-month; fresh statement from Swiss Credit saying that Pakistani stocks market would be standing near 11,200 points by June; and an expectation of 50-100bps cut in State Bank’s lending rate in its November Monetary Policy Review Statement.

The price-rise, however, failed to improve the average daily turnover, as it remained flat at 131.60 million shares against 131.63 million share of last week. But the overall market capitalisation enhanced by Rs35 billion to Rs2,623 billion.

The broader future outlook is optimistic as continuous terror attacks in the country; absence of commodities like sugar and shortage of cotton with their prices hovering higher; and collection of taxes well below the set target for every month may keep market under the pressure, analysts further said.

KASB Securities foresaw that new flow from IMF, monetary policy expectations and political rumblings are likely to determine market direction in the immediate future. “While we have a positive view of expected foreign inflows from IFIs and friendly countries and potential monetary easing, we remain wary of the increasing political noise as November-28 deadline for expiry of the NRO approaches.”

Lakson Tobacco, Javedan cement, Pakistan PTA, Bannu Woollen and WorldCall Telecom were major gainers while Bestway Cement, Pakistan Services, Siemens Engineering, Gharibwal Cement and Wazir Ali Industries were major losers at KSE this week, the brokerage house added.

Movement in Weekly Volume Leaders

Symbols Opening on Close on Difference

Tuesday (Rs) Friday (Rs) (Rs)

AH Securities 48.43 49.84 1.41

Attock Refinery 135.15 145.96 10.81

Azgard Nine 20.82 21.27 0.45

DGK Cement 26.62 28.48 1.86

JS Siddiqui 29.48 31.08 1.60

Nishat Mills 59.09 60.21 1.12

O.G.D.C 103.37 102.74 -0.63

P.T.C.L 17.97 17.97 zero

Pak.PTA 6.66 7.46 0.80

TRG Pakistan 2.05 2.25 0.20