Karachi bourse remains range bound during the week


The Karachi stocks market remained range bound with corrective spells during the week as KSE-100 index lost 56 points week-on-week (WoW) to close at 13,297pts.
The investors’ confidence remained intact as daily average volume stood at 400mn shares compared to 355 mn shares last week, increasing by 12.7% WoW, said the analysts at InvestCap.
“In line with previous week most of the activity was witnessed in low tier scrips as total traded value declined by 11.99% to USD 78.5 million,” viewed Hasan Raza.
With the net selling by foreigners during last two days of the week, FIPI witnessed an inflow of USD 1.6mn during the week compared to inflow of USD 7.5mn in the previous week, the analyst said. Higher oil prices and better foreign remittances figures fueled, he added. On the fiscal side, he said, figures released related to tax collection during 8MFY12 portrayed optimism over Govt. financial position as increase of 28%YoY to PKR 1,222bn was witnessed, however during the same period Govt. borrowing exceeding whooping PKR 916bn took the gloss away from the excitement.
The Govt. also conducted PIB auction during the week in which PKR 25bn were raised against maturity of PKR 28bn, with upward shift in yield curve. Meanwhile, expected decline in water availability to Rabi crops has raised concerns over the Govt. agriculture growth target of 3.4% during FY12. There were also few positives vibes for banking sector related to increased penetration from branchless banking (growing 15%YoY during 2QFY11) and recovery of overall NPLs of banks and DFI. The analyst said the market’s open interest position during the week declined by Rs 94mn (down 3.9% WoW) to stand at Rs 2.3bn.
Future volumes followed the same path as they declined by 10.7% WoW to 13.1mn shares. However, futures spreads went up by 284bps WoW to 10.40%. The top-5 scrips at the futures counter holding 64% of the total open interest were ENGRO, NBP, FFC, DGKC and POL.
“With the corrective spell this week, market seems to consolidate at these levels,” said Raza. The CGT issue, he said, will remain a key driver for the investors’ confidence and hence would define the trend in the market. “For the coming week, we expect market to remain sensitive to fresh political situation in the country,” he concluded.