KARACHI – The local bourse was in doldrums, dwindling 818 points this week, as the index closed at around 11,223 points with an average weekly volume of 98 million shares. Investors were unwilling to invest and stayed cautious. The index closed at the lowest level of 11,223 points in the year. Foreign investors continued to off-load their investments, amounting to $5.47 million -dampening the already low sentiment.
Furthermore, the geo-political situation remained a crucial element after the Raymand Davis incident. Circular debt, along with a continued surge in oil prices in the international market, threatened the economy. Opposition parties were unwilling to help the current regime in raising the petroleum prices inline with the international market, which will provide some cushion to the government.
“We believe it would be difficult for economic management to maintain fuel prices at the current level following the recent hike in international crude,” said Bilal Asif at HMFS. PML-N’s deadline came to an end today, but the ruling party was unable to implement the agenda proposed. US pressure to release the so called diplomat also played a role in increasing uncertainties.
Being an investor, the current situation seems to create a mouth watering opportunity to accumulate quality stock at a fairly reasonable price. But for bargain hunters, it would not be considered as the appropriate time to invest, most likely a correction of around 500 to 750 points may persuade them to enter the market.
Annual and half year result season is nearly finished which may provide few more results, but sentiment seems to be so week that we may not see a major change due to result surprise. Progress on MTS over the last couple of weeks is quite encouraging, but it was unable to change market sentiment.
Month to date index has already lost around 9.19 percent, with around 85 percent of the 100 index companies in negative zone. Top tier stocks were the major culprit behind the current market performance.
