KARACHI: Continuous inflow of foreign investment in the equity market and cut in NSS rates encouraged the local institutions and retail investors to take fresh positions during the week ended on July 3, 2009. The KSE-100 index surged by 308.24 points, or 4.3 percent, to close at 7,471.28 points level from previous week’s 7163.04.

Trading improved and the average daily volumes at ready counter increased by 24 percent to 135.578 million shares as compared to previous week’s 109.010 million shares.

Market capitalisation increased by Rs 85 billion to Rs 2.205 trillion. Foreign investors remained net buyers during the week and a fresh inflow of $9.7 million of portfolio investment was recorded. The week started on a positive note and the index gained 43.13 points to close at 7,206.17 points level with a volume of 95.747 million shares on Monday.

However, the index lost 43.99 points to close at 7,162.18 points on Tuesday mainly due to profit taking opted by the investors with 100.041 million shares. On Wednesday, the market once again took upward trend and the index increased by 108.54 points to close at 7,270.72 points level with 104.614 million shares.

The bullish trend continued and the index surged by 227.62 points to close at 7,498.34 points level with 195.946 million shares on Thursday. On Friday, the market continued its upward trend in the first session and the index hit 7,570.73 points intra-day high level, however, the index finally closed in negative at 7,471.28 points level, with a net loss of 27.06 points with 181.544 million shares.

Mustafa Bilwani, an analyst at JS Global Capital, said that the rally was led by energy stocks followed by fertiliser and telecom. Investors breathed a sigh of relief as all major sectors performed well. The stock market also welcomed the decrease in NSS rates and start of the new fiscal year, while foreigners continued their renewed interest in the bourses. Refineries, E&P and OMCs led the way this week posting handsome gains of 8.5 percent, 6.0 percent and 5.3 percent, respectively.

Revision in oil prices are expected to improve refinery margins in absolute terms and anticipation of better than expected earnings in E&P sector led the rally. Fertilizer sector posted an increase of 4.4 percent on week-on-week basis on the back of rising feedstock prices which lead companies to increase urea price by Rs 10 per bag. Telecom sector also rose by 2.8 percent after an earlier than expected dividend offered by PTCL.

Muniba Mirza at Invest Capital and Securities said that the investors’ interest at the KSE remained plentiful throughout the starting week of FY10 as average daily volumes increased by a substantial 24 percent.

The decrease in NSS rates induced increased investors’ interest at the share market while expectations of the leveraged product along with cut in discount rate fuelled activity. Further positivity was injected by the Rs 1.5 per share dividend announced by PTCL along with inflow and approval of $500 by ADB and $50 million by the World Bank, respectively.

[source: brecorder.com]