KARACHI – The current week can be considered as the best week of the year with an outstanding gain of over 776 points with reasonably better volume when compared with YTD average volumes. The bullish rally was completely driven by local investors while foreign participation can be termed as negligible. During the week market witnessed an inflow of $292 million thanks to Friday’s inflow of $4.67 million, which turned the inflow towards the positive territory.
The much awaited MTS is expected to be launched during the weekend by finance minister. The launch of MTS can be considered as one of the major reason behind the benchmark performance. Furthermore bearish rally carried loss of around 1,690 points since the CYTD high, hence paving way for prudent investors to start investing in the market.
Stocks like FFC, NBP, POL, Engro, DGKC and LUCK were trading at a sizable discount to their intrinsic value, which provided fund mangers with an opportunity to capture valuable stocks at cheap prices. Market punters were actively participating. Once again political pressure was mounted over the government to reduce the petroleum prices at previous level and the government is expected to partially revise the petroleum prices down.
Market sentiment seems to be quite strong while rumors of revisiting the CGT are also circulating in the market. “We believe the government may not be in a position to withdraw CGT with limited financial resources,” said Bilal Asif at HMFS, adding that all the top tier stocks were adding value to benchmark index. NBP result was quite a surprise to investors with exceptional payout with stock price appreciated by around 20 percent followed by rest of the sector. From the oil sector POL and PPL lead the market and fertiliser sector raced inline with market.
Deja vu of 2008 were felt by the investors as Arabian light crude prices soared over $100 per barrel following unrest in Middle Eastern countries especially Libya. Subsequently, as the crisis seared international market contagion phenomenon soon kicked in at the local bourse also as benchmark 100 shed by 1,070 points or 8.66 percent to 11,289 levels in the month of February. On domestic front, political uncertainty brew further as 45 days deadline to meet proposed 10 points agenda by PML (N) approached the finish line, which ruling party failed to implement completely dampened the sentiments further.
Diplomatic row with the US following arrest of its citizen, rising circular debt and fear of imminent inflationary pressure along with negative repercussion of rising commodity price on domestic economic further fueled downward pressure at local bourse. Foreign inflows remained jittery during the month however net inflow of $4 million was witnessed.
