KARACHI: The KSE-100 index gained 123.31 points during the week endded on June 27, 2009 to close at 7,163.04 points on the back of fresh buying mainly by foreign investors. “Besides foreign investors’ interest, local institutions and retail investors also joined the rally and took fresh positions in some select stocks”, analysts said.

However, the absence of leverage product still remained the issue that restricted the investors from aggressive buying and the average daily volume amounted to 109.010 million shares as compared to 101.632 million shares of the previous week. Market capitalisation increased by Rs 32 billion to Rs 2.120 trillion.

Foreign investors’ inflow of over $16 million was recorded during the week. On Monday, the market opened on a positive note and the index, after touching 7,133.42 points intra-day high, closed at 7,057.26 points, up by 17.53 points, with a volumes of 98.404 million shares.

On Tuesday, the market witnessed mixed trend and the index closed at 7,023.48 points, down by 33.78 points, with 86.428 million shares. On Wednesday, the index inched up by 2.41 points to close at 7,025.89 points level with 103.181 million shares.

On Thursday, some fresh buying was seen and the index surged by 102.94 points to close at 7,128.83 points level, with 104.371 million shares. The positive trend continued on Friday and the index gained 34.21 points to close at 7,163.04 points level with 152.664 million shares.

Bilal Qamar, analyst at JS Global Capital, said that foreigners were major players at the local bourse with their net buying for the week accumulating to $16 million, a high of 14 months. As a result, the market recovered 1.8 percent from previous week. Moreover, positive news were welcomed in the form of rise in merger and acquisition activities with Askari Bank showing interest in merging with Mybank and Vision Holding Middle East acquiring a 25 percent stake in Pioneer Cement.

However, he said no confirmation on the possible introduction of a leverage product kept the local investors on the sideline, hence average daily volumes remained thin.

Saad Arshad at Invest Capital and Securities said that the index remained relatively mixed as the debate for budgetary amendments raged in the National Assembly. A few significant changes, such as alternation in the taxation structure and a commitment by the government not to in crease power tariff brought a sigh of relief from the industrial sector.

Reduction in WHT on industrial imports to 3 percent from 4 percent and a removal of Re. 0.20/SMS additional tax on Telecom further elevated sentiment. Moreover, the ambiguity surrounding the exporters was also eliminated with the issuance of a clarification that the tax collected on exports turnover would be final.

[source: brecorder.com]