Investors at the Karachi Stock Exchange remained cautious, adopting a wait-and-see policy throughout the week. Week-on-Week basis, the benchmark KSE-100 index gained 37 points over the past week ended on Friday. The index closed at new peak level of 16,845.09 points against 16,807.91 points a week ago.
"During the last week, trading activity was very dull. It went down by (as much as) 43 percent, as investors remained uncertain on the quantum of interest rate cut," said Samar Iqbal, an equity dealer.
However, investors sentiment was bullish in cement stocks on expectations of healthy earnings for the quarter while international call rate hearing and expectation of duty protection for local PTA manufacture kept PTC and LOTPTA also on investors'' radar, she added.
Furthermore, Economic Co-ordination Committee (ECC) granted approval of new pricing for Qadirpur gas field, triggering some fresh buying in OGDC as well, she maintained.
"We expect that the market will continue to making new highs after the policy rate announcement of 9.5 percent for next two months. However, year-end phenomenon may keep market activity dull," she said. No major change was witnessed in market capitalisation week-on-week. The overall market capitalisation stood at Rs4,217.55 billion against Rs4,217.79 billion a week ago.
Trading activity remained dull owing to investors'' cautious attitude: with a decline of 43.2 percent, daily trading volumes shrank to 135.53 million shares against the previous week''s average volume of 239 million.
Average daily trading value declined by 37.5 percent to Rs3.64 billion from Rs5.82 billion. Foreign investors remained net sellers of $3.8 million during the past week against the sale of shares worth $2.2 million a week ago.
During the initial two days of the past week, sentiments at local bourse remained negative because of selling pressure and investor''s profit-taking. However, a positive trend was witnessed during the remaining three days of the week.
On Monday, Karachi Stock Exchange ended lower because of profit-taking in overbought stocks. The KSE-100 index lost 20.37 points, closing at 16,787.54 points, down from 16,808 points.
Bearish trend was witnessed on Tuesday at the local bourse, followed by selling pressure. After various fluctuations, the KSE-100 index fell by 86 points, closing at 16,701.69 points, down from 16,787.54 points.
After a two-day bearish trend, sentiments turned positive on Wednesday at Karachi share market, as investors interest perked up across leading sectors. KSE-100 closed at 16,744.60 points, up 43 points.
On Thursday, market witnessed positive trend, with an increase of 62 points, the benchmark KSE-100 index closed at 16,806.58 points, up from 16,744.60 points.
On the last trading day of the week, Karachi stock market closed in bullish mode followed by massive buying of selected scrips: the KSE-100 index increased by 38.51 points to close at 16,845.09 points, up from 16,806.58 points.
Furqan Ayub, an analyst at JS, said that investors at the local bourse were cautious throughout the week ahead of the monetary policy. However, market expectations were realised when State Bank of Pakistan (SBP) opted to cut the discount rate by 50 basis points to 9.5 percent.
"This is the first time since July 2007 that the discount rate has come down to a single digit, largely due to soft CPI inflation and it will put a positive impact on the market," he said.
Market participation was limited as investors adopted a wait-and-see approach pre-monetary policy announcement. Other key highlights of the week included large scale manufacturing (LSM) growth at 1.95 percent in the first four months of FY13, trade deficit decreased by 20 percent year-on-year in November this year and a three percent dip on month-on-month basis in local automobile sales in November this year, he pointed out.