KARACHI: The Karachi stock market witnessed a positive trading week on support from buying activities as increased expectations of funding by World Bank and Asian Development Bank in economic assistance to Pakistan raised investor’s confidence, analysts said on Saturday.
The Karachi Stock Exchange (KSE) 100-share index gained a modest 2.9 points or 0.03 percent to close at 9,184.24 points as compared with previous week’s 9,181.35 points.
While the continuation of the price floor mechanism is hampering activity in the normal market, more than normal off-market transactions have been witnessed since there is no price limit prevailing there.
The average turn over volume plunged to 0.193 million shares compared to 1.83 million shares traded previous week.
Muneeba Saeed, Analyst at Invest Cap Research said volumes at the KSE fell to 0.193 million shares on Friday, a level witnessed never before, on the back of shattered investors’ confidence. Despite attractive valuations, the KSE 100 index remained frozen at the same level throughout the week, highlighting abysmally low investors’ interest.
Although the KSE board’s decision to finally remove floors and the declining value of oil in the international market was expected to provide support to the local bourse, but the declining rupee against the dollar and depleting forex reserves fanned panic amongst investors.
Atif Zafar, Analyst at JS Global Securities said in his comments with hardly any activity in the official cash and derivatives counter, substantial increase in transactions at the off-market counter was seen.
A portion of the transactions in off-market are the actual buying and selling of the investors, thus reflecting the true market value of the stocks. Based on this week’s transaction, we estimate that KSE index is expected to close at 7,400 points, 19.4 percent down from the official closing of 9,184 points. At the normal counter, average daily volumes last week were at record low because buyers were getting shares at discounted prices in the off-market.
With CFS rate jumping to a 7-year high of 63 percent on October 9, 2008 and many investors unable to rollover their position, the regulator decided to roll over positions forcefully. On Oct 14, 2008 NCCPL decided that investors having position as of October 9, 2008 would have their contract extended for another 22 business days.
This forced rollover reduced activity at the CFS counter. Hence, average daily volumes in CFS declined to 0.3 million shares or Rs 21.9 million only with CFS rate closing the week at 59.46 percent.
Ahsan Mehanti, Analyst at Shahzad Chamdia Securities in his comments over reasons for positive index said recovery in Asian capital markets, easing liquidity crunch, positive expectations regarding maintenance of price floor up to October 27 and hopes on market recovery after PM advisor’s appointment helped investors’ sentiments get positive. staff report
No comments:
Post a Comment