The acceptance of SECP’s tax reform proposals by the Ministry of Finance has augured well for the local stocks market which, according to analysts, generated a small rally of five per cent during the last few trading sessions. With the open interest increasing to the tune of Rs877 million up to Wednesday in the Margin Trading System (MTS), Karachi Stock Exchange (KSE), in line with regional markets, has so far rallied 11.1 per cent, 10.0 per cent in dollar terms, during the current calendar year. “The most interesting thing of the current run up in share prices is that it is accompanied by decent volumes,” said Mohammed Sohail, Senior Analyst and Chief Executive Officer of Topline Securities. Compared to the last quarter average daily volumes of 59.7 million shares, Rs2.8 billion or $32.2 million, the average daily volumes at KSE in this quarter up till now was 119.0 million shares, which account for Rs3.7 billion or $41.0 million. “Though volumes have improved it is far lower than average daily of approximately 300 million, Rs24.8 billion or $417.5 million seen in 2003-07,” the analyst said. As a consequence of rising share prices with better volumes, he said, the leveraged positions in MTS and futures had also increased. Though not at alarming levels so far and far lower than what it used to be in the past, these MTS volumes might make the share price of actively-traded stocks slightly more volatile in the short run.
