Bullish trading activity was witnessed on Karachi’s stocks market on Friday on the back of institutional and foreign interest in the oil and cement sector blue chip scripts. The equity market, however, saw thin volumes ahead of the investor’s fear over possible unfavourable announcements in the federal budget for fiscal year 2011-12 to be unveiled after a few hours.
Arif Habib Investments Director Ahsan Mehanti observed, “Bullish activity was led by institutional and foreign interest at KSE,” Throughout the last trading day of the week the benchmark of the KSE 100-shares index remained above the 12,000 mark to close at 12,236.66 points against 12,179.81 points on the previous day. The KSE 100 index gained 56.85 points (0.47 percent) with 148 companies appearing as winners, 104 losers and 102 unchanged.
The market capitalisation also remained in the green zone and closed at Rs 3.251 trillion, exhibiting an increase of Rs 15 billion against Thursday’s Rs 3.236 trillion. Fauji Cement was the volume leader of the day seeing 11.043 million of its shares traded at per share opening and closing prices of Re .09 and Re .13, respectively. The day saw KSE 100 index hitting an intraday high and low of 12,266.21 and 12,163.62 points, respectively.
Despite a bullish trend the equity market could not attract volumes primarily because of what the analysts said investors’ negative apprehensions about the new fiscal budget. According to Mehanti the volumes that the Karachi bourse saw were “thin trade ahead of the federal budget announcement today”. Total share trading recorded at the ready-counter stood at 65.315 million, registering a decline of 25 percent or 21.99 million shares when compared with Thursday’s 87.311 million.
The volumes in future contracts were also recorded lower at 2.940 million shares against 3.251 million of a day earlier. Failing to perform well on the volume side, the KSE 100-share index was boosted by, as the analysts described it, expectations of the institutional and foreign investors regarding possible positives in the new federal budget. “Bullish sentiment was led by oil and cement sector scripts on expectation of favourable budget announcements,” Mehanti viewed.
The market observer said that the investors’ focus on higher Public Sector Development Program (PSDP) allocations and oil and gas production in the federal budget kept the market sentiments positive. Further the analyst observed that “expectations of favourable announcements for the capital market investors (also) kept the sentiments positive at KSE.” This, Mehanti noted, was despite the investors’ concerns for negatives like ever-increasing government’s budgetary borrowings, inflation and lower economic growth as indicated in Economic Survey 2010-11 that was unveiled on Thursday.
