KARACHI: The removal of anomalies from the budget 2009-10 ahead of corporate result announcement season and June-closing invited notable foreign and local buying on the Karachi bourse this week.
The KSE 100-share Index gained 123 points or 1.75 per cent during the week and winded up at 7,163 points on the weekend. The KSE 30-share Index surged by 155 points or over two per cent and ended at 7,603 points this week.
Analysts are of the view that the corporate result announcement season attracted investors to buy high dividend paying or speculative stocks available at lucrative levels. Therefore, the local and foreign financial institution in anticipated profit buying and accumulated selective stocks.
Foreigners alone injected $17.6 million in net during the week, which according to JS Research is of 14-month high quantum.
Foreigners were on their back foot since the introduction of floor-price mechanism at local bourses on Aug 28, 2008 and since then they had divested $315.6 million to date. The floor-price mechanism was removed on December 15, 2008 but owing to its interim application, the Morgan Stanley Capital International Barra (MSCI Barra) had excluded Pakistan from its Emerging Markets and foreigners continued to exit Pakistan markets.
Alone in the first half of calendar year 2009, overseas investors had disinvested $273.4 million to date, according to NCCPL.
Very recently, MSCI Barra has included Pakistan into its Frontier Markets, which is one notch lower than Emerging Markets.
Bilal Qamar at JS Research observed continued-declining trends in net foreign selling since Pakistan’s inclusion into MSCI Frontier Markets Index, which this week turned into massive foreign buying, he reiterated.
Including injection of foreign funds into the local markets, investors from all walks of life have together infused total Rs32 billion capital at Karachi bourse during the outgoing week.
Increase in buying interest also helped market generating higher turnover too.
The average daily turnover of this week stood at 109 million shares, which is over seven per cent higher than 101.6 million shares of last week.
Khurram Shahzad at InvestCap was of the view that the last year impairment losses forced the seasoned investors to inject more money into market ahead of June closing so that they could hide their losses on balance-sheet for the quarter ending on June 30.
The Securities & Exchange Commission of Pakistan (SEPC) had allowed companies last year to show their losses for the year 2008 in the next four quarters of calendar year 2009. And impairment losses would be calculated on the basis of the closing share price of each quarter’s last day session at Karachi bourse. So as high would be the closing share price on June 30 the losses would be as lower in comparison and contrast, he explained.
Major activity was witnessed in leading exploration & production companies and banks namely Oil & Gas Development Company and MCB Bank. These two particular stocks gave good gain in the indices, it was learnt.
Qamar added that recent announcements about merger and acquisition in financial and cement sectors also created momentum for bullish activities. This week Askari Bank (AKBL) showed interest in merging with Mybank Limited (MYBL) and Vision Holding Middle East Limited (VHMEL) acquiring a 25 per cent stake in Pioneer Cement (PIOC), he added.
Gul-e-Zehra Jafri at KASB Securities foresaw a likely shift in market focus to (1) Monetary Policy Statement in early July; (2) meeting of Pakistan’s economic managers with the IMF; and (3) developments on re-introduction of leverage financing at the KSE would continue to dictate market forces.
Askari Leasing, Arif Habib Bank, KASB Bank, Pakistan Refinery and Nestle Pakistan were major gainers while Samba Bank, First Capital Securities, Fazal Textile, New Jubilee Insurance and Lakson Tobacco were major losers at the KSE this week, according to KASB.
The KSE 100-share Index gained 123 points or 1.75 per cent during the week and winded up at 7,163 points on the weekend. The KSE 30-share Index surged by 155 points or over two per cent and ended at 7,603 points this week.
Analysts are of the view that the corporate result announcement season attracted investors to buy high dividend paying or speculative stocks available at lucrative levels. Therefore, the local and foreign financial institution in anticipated profit buying and accumulated selective stocks.
Foreigners alone injected $17.6 million in net during the week, which according to JS Research is of 14-month high quantum.
Foreigners were on their back foot since the introduction of floor-price mechanism at local bourses on Aug 28, 2008 and since then they had divested $315.6 million to date. The floor-price mechanism was removed on December 15, 2008 but owing to its interim application, the Morgan Stanley Capital International Barra (MSCI Barra) had excluded Pakistan from its Emerging Markets and foreigners continued to exit Pakistan markets.
Alone in the first half of calendar year 2009, overseas investors had disinvested $273.4 million to date, according to NCCPL.
Very recently, MSCI Barra has included Pakistan into its Frontier Markets, which is one notch lower than Emerging Markets.
Bilal Qamar at JS Research observed continued-declining trends in net foreign selling since Pakistan’s inclusion into MSCI Frontier Markets Index, which this week turned into massive foreign buying, he reiterated.
Including injection of foreign funds into the local markets, investors from all walks of life have together infused total Rs32 billion capital at Karachi bourse during the outgoing week.
Increase in buying interest also helped market generating higher turnover too.
The average daily turnover of this week stood at 109 million shares, which is over seven per cent higher than 101.6 million shares of last week.
Khurram Shahzad at InvestCap was of the view that the last year impairment losses forced the seasoned investors to inject more money into market ahead of June closing so that they could hide their losses on balance-sheet for the quarter ending on June 30.
The Securities & Exchange Commission of Pakistan (SEPC) had allowed companies last year to show their losses for the year 2008 in the next four quarters of calendar year 2009. And impairment losses would be calculated on the basis of the closing share price of each quarter’s last day session at Karachi bourse. So as high would be the closing share price on June 30 the losses would be as lower in comparison and contrast, he explained.
Major activity was witnessed in leading exploration & production companies and banks namely Oil & Gas Development Company and MCB Bank. These two particular stocks gave good gain in the indices, it was learnt.
Qamar added that recent announcements about merger and acquisition in financial and cement sectors also created momentum for bullish activities. This week Askari Bank (AKBL) showed interest in merging with Mybank Limited (MYBL) and Vision Holding Middle East Limited (VHMEL) acquiring a 25 per cent stake in Pioneer Cement (PIOC), he added.
Gul-e-Zehra Jafri at KASB Securities foresaw a likely shift in market focus to (1) Monetary Policy Statement in early July; (2) meeting of Pakistan’s economic managers with the IMF; and (3) developments on re-introduction of leverage financing at the KSE would continue to dictate market forces.
Askari Leasing, Arif Habib Bank, KASB Bank, Pakistan Refinery and Nestle Pakistan were major gainers while Samba Bank, First Capital Securities, Fazal Textile, New Jubilee Insurance and Lakson Tobacco were major losers at the KSE this week, according to KASB.
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