Karachi Stock Market Weekly Review Dec 14, 2009

During last three working days, Karachi Stock Exchange back and showed a bullish trend. Although in first two days of last week, market was dull and lacklustre. But in last three days, market has revived and was succeeded on maintaining psychological level of 9,000 points. On the end of last week, KSE - 100 index has reached 9,037.30 points on the increase of 28.17 points or 0.31 percent, and its parallel running junior KSE – 30 index was on 9,496.10 points, after the increment of 31.97 points or 0.33 per cent. Remember KSE 100 – index was closed at 9,009.13 points and KSE – 30 index was on 9,464.13 points on closing of first week of December (4 December, 2009).

As we have discussed earlier that market was dull and volatile since Eid, and was also in first two days of last week. Following are the key factors for this decline:

  • Supreme Court had started hearing cases related to NRO, and other corruptions. Highly influenced personalities including President are involved in these cases.
  • Debt de
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    bacle emerged in Dubai since Eid had shook the financial markets globally and also affected our local market.
  • In almost all parts of country there is a depressing law and order situation, terrorist activities etc.

But in the middle of last week we have found some positive activities which have ignited the index and market had started the revival. According to analyst if market will show persistence and Government will reform all above mentioned issues, then hopefully KSE – 100 index will reach a benchmark of 9,800 points at the end of December, 2009. Following are the important triggers which causes market revival:

  • Dubai financial markets have recovered up to 7 per cent, and Global financial markets have started rebound.
  • increase in local oil and gas productions
  • In its Annual Sovereign Report, Moody’s Investor Service has rated “B3” and given a stable outlook to Pakistan.
  • Positive inflow on Manzalai production and increased remittances flow in November 2009 ($742 million)
  • Strong valuations in bank, fertilizer and textile scrips. And there are positive activities are witnessed in Banking, Investment and Insurance sectors, because they are near on closing financial year. And positive results are expected especially NBP, ABL, and MCB etc.
  • A meeting of IMF Executive Board to finalize the fourth tranche of $1.2 billion to Pakistan in December.
  • Government is planning to launch National Savings Bonds on local stock exchange during current month.
  • BOP (Bank of Punjab) is doing well, because there were news on recovery of bad loans, and Ex-President Hamesh Khan has also been arrested in US, some other defaulters (e.g. Sheikh Afzal, Harris Afzal, and others) were already arrested, which were accused of corruption of Billions of Rupees.

We recommend all investors, that it is best time of buying. Because almost all sectors are now on very reasonable prices, and have touched their possible low ranges. Invest at your own risk and after thoroughly reviewing all possible aspects, history, quarterly reports etc.

Arif Habib Bank, NCL, JSCL, PAKRI, BAFL, OGDC, PSO, PPL, KESC, Fauji Fertilizer, DGKC, LUCK, were on top last week.

NOTE: The information posted in this blog (forum) is based on current afairs & invstors point of view. There may be discrepency in the ground realities.

Written by: Rana Khurram


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