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WEEKLY
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| Fresh wave of terror attacks upsets stock gurus |
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Sunday, November 08, 2009
By Salman Siddiqui
KARACHI: The end of corporate results season for the September quarter made way for political issues to exert influence on the Karachi bourse this week.
Besides, a fresh wave of terror attacks also made investors upset again. The market lost its psychological level of 9,000 points, shedding 2.43 per cent this week with average daily turnover falling to an 11-week low of 131.63 million shares.
Despite panic-like selling amid notable price erosion, overseas investors were buyers of shares worth $6.6 million this week as well. The KSE 100-share index declined by 2.43 per cent or 222.70 points on weekly basis and closed at 8,936.48 points. Therefore, the market lost 9,000 points threshold after maintaining above this for seven-and-half weeks, as this was Sep 11, 2009 session in which the market had recovered this level.
Free float market capitalisation based 30-share index fell 2.75 per cent or 266.43 points and settled at 9,396.44 points on week-on-week basis. “Fertilizer and E&P sectors outperformed the market however; their market capitalization fell by only 0.6 per cent and 1.6 per cent, respectively. Higher oil prices and news regarding additional gas supply from Manzalai kept investors interested in the E&P sector while Engro was the preferred stock in the fertilizer sector. Engro’s market capitalization grew by 3.2 per cent on weekly basis,” reported JS Research.
Analysts said uproar on NRO widened the rift among ruling parties, which at a point of time this week pressurized Asif Ali Zardari to leave his post. This uncertain situation worsened business sentiments at the local bourse too.
Moreover, the Monday bloody attack in garrison city of Rawalpindi, claiming about 30 lives besides dozens wounded, also convinced many to change their investment decisions to disinvest, analysts added. This entire bleak situation suggested investors to go on sideline, resulting in a thin turnover throughout the week. For example, the Friday twin-trading sessions together generated four and half month low turnover of mere 97.12 million shares.
The continuous depletion in daily turnover weakened the case of Pakistan to be included in Emerging Markets of Morgan Stanley Capital International Barra (MSCI Barra) in its next review meeting.
This pathetic situation also empowered bearish forces to set orders at the bourse during the week. But all was not bad. The market talked about a likely reduction in the central bank discount rate by 50-100 basis points in November Monetary Policy Statement restored confidence among investors on Wednesday, recovering 2.42 per cent in that single session. While, investors ignored the approval of financing product for stocks markets i.e. Margin Financing System by the Securities & Exchange Commission of Pakistan (SECP). They also overlooked a statement of the finance minister about receiving $1.2 billion from the IMF in the middle of December 2009 amid ending corporate debt worth Rs60 billion in the country. The average daily turnover fell by approximately 30 per cent on week-on-week basis to 131.63 million shares, which is 11-week low, as per JS Research.
Accordingly, the overall market capitalisation fell by Rs67 billion and stood at Rs2,588 billion. “Despite security concerns, foreigners continued their interest at the bourse with net buying of $6.6 million shares. They offloaded shares worth $13.6 million and bought shares worth $20.2 million. In contrast, banks, individuals and companies remained on the selling side as they sold net shares worth $5.0 million, $3.7 million and $1.4 million respectively.
Moreover, mutual funds (MF) continued their selling as they were net sellers of $0.5 million,” the brokerage house added. Market is expected to depict a relatively similar pattern over the coming week.
PICT, Attock Refinery, Lakson Tobacco, Bannu Woollen and Ibrahim Fiber were major gainers while Jahangir Siddqui & Co, Lafarge Pakistan, EFU Life Assurance, KESC and Azgard Nine were major losers at KSE this week, according to the brokerage house.
Movement in Weekly Volume Leaders
Symbols Opening on Close on Difference
Monday (Rs) Friday (Rs) (Rs)
Adamjee Ins. 125.35 116.17 -9.18
AH Securities 51.62 48.43 -3.19
Bank Al-Falah 13.53 12.75 -0.78
Bosicor Pakistan 8.76 8.66 -0.1
DG Khan Cement 29.04 26.62 -2.42
Engro Chemical 164.22 170.19 5.97
F.F.B.Q 24.72 24.19 -0.53
JS Company 35.1 29.48 -5.62
National Bank 82.28 76.11 -6.17
Nishat Mills 60.38 59.09 -1.29
O.G.D.C 103.61 103.37 -0.24
Pak.Prem Fund 6.5 5.99 -0.51
Pak.PTA 7.1 6.66 -0.44
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ISSN 1563-9479 
