Impasse mutes performance
By RECORDER REVIEW
the prevailing political uncertainty in the country, the
Karachi Share market remained volatile during the last week
end on August 29, 2014.
Overall the benchmark
KSE-100 index posted a decline of 304 points (weak on weak)
to close at 28,568 points end of the last week compared to
28,872 points a week earlier.
Among five trading days of
the week, initial four days market remained negative.
While on last trading day
the share market closed higher after the PAT and PTI
accepted Army as mediators and announced to resume dialogues
with the government to end the protest.
After declining 3.8 per cent
during the first four trading days (Monday to Thursday) of
the week due to continuing political deadlock, the benchmark
index staged a strong recovery on Friday, gaining 793 points
or 2.9 per cent as the midnight meeting between protest
leaders and the Army chief fuelled the expectations of the
At the end of the week, the index closed at 28,568 points,
down 1.1 per cent WoW.
The political noise kept the majority of investors on the
sidelines, as average daily trading volumes declined by 4.4
per cent (WoW) to 119 million shares compared to 124.3
million in the pervious week.
In addition, with
average daily value traded down 3.7 per cent (WoW) to $61.84
million per day from $65.18 million. The market
capitalisation also posted a 0.5 per cent decline to Rs
6.727 trillion at the end of the week.
"Investors'' concern on the current political crisis in the
country muted the performance of the stock market as the
benchmark KSE-100 index lost 1,100 points during the first
four sessions of the week.
However, the market recovered
on the week''s last trading day by 793 points on probable
resolution of the deadlock given talks between the Army
Chief and the protesting parties," said Rahel Ashraf of the
Resultantly, the KSE-100 index closed the week at 28,568,
down 1.1 per cent WoW, while low investor confidence
reflected in the average trading volumes as well which
declined by 4.4 per cent 19 million shares, he added.
Construction and Materials
sector plunged by 4 per cent WoW on the risk of the
imposition of anti-dumping duty on Pakistan Cement exports
to South Africa.
better-than-expected earnings and dividend announcements led
to KEL outperforming the market by 11 per cent WoW, Ashraf
Other highlights of the week included Current Account
deficit clocking in at $454 million in July 2014 vs.
$125 million in July 2013,
the LSM growth of 3.9 per cent YoY for the FY14, the Prime
Minister signing $664.8 million project financing for Dasu
Hydropower Project and Sindh Agriculture Growth Project with
World Bank, Pakistan receiving $371.4 million from the US
under the CSF and forex reserves dipping by $344 million to
Commenting on the outlook of the market, an analyst at the
KASB Securities said the next week''s market performance
depended completely on the resolution of the current
political stalemate between the ruling party, Pakistan
Tehreek-e-Insaaf and Pakistan Awami Tehreek.
"We believe that the involvement of the army as a
facilitator in the political crisis is a positive
development and has raised the possibility of an early
resolution - a scenario, which can sustain the rally," he
"However, with the current situation emerged on Saturday
night, when the government started an action against the PAT
and PTI protestors, marching toward the Prime Minister
House, has created another uncertainty regarding law and
order situation," analysts said.
They said that clashes between police and protestors may hit
the sentiments of the market players and investors.
The market participants shall continue to actively track
political news flow with any possible resolution to be
hailed at the bourse, they added.