Index gains 91.87 points

The KSE-100 index gained 91.87 points during the week ended on October 8, 2011, and closed at 11,853.84 points on the back of local investors' interest in some select stocks in cement and fertiliser sectors. Foreign investors remained on the selling side and withdrew $2.7 million from the local equity market against an outflow of $7.3 million of previous week.
Trading remained low and the investors remained on sidelines, awaiting announcement of monitory policy statement by the State Bank of Pakistan. Average daily volume at the ready counter declined by 9.3 percent to 75.50 million shares as compared to previous week's 83.23 million shares.
Market capitalisation increased by Rs 23 billion to Rs 3.126 trillion.
On Monday, the market opened under pressure and the index declined by 53.72 points to close at 11,708.25 points with volume of 55.946 million shares.
On Tuesday, bullish trend was witnessed due to investors' interest on dips and the index surged by 225.03 points to close at 11,933.28 points with 105.657 million shares.
On Wednesday, the market opened on strong positive note and the index hit 11,999.29 points intra-day high level. However, the investors opted for profit taking after mid-session and the index closed at 11,868.17 points, down 65.11 points, with 82.644 million shares.
On Thursday the index lost 29.17 points to close at 11,839.00 points with 62.750 million shares.
On Friday, investors' interest was seen on dips that supported the index to register an increase of 14.84 points to close the week at 11,853.84 points with 70.482 million shares.
Yawar Uz Zaman, an analyst at InvestCap said another positive week was witnessed by the KSE, where the index gained 92 points on week-on-week basis. Bullish sentiment emerged with the fertiliser (Engro) and cement (LUCK) sectors witnessing product price rises. Moreover, government announcement to issue longer-term bonds to offset dues of the oil and energy chain also caught investors' interest in the energy/oil sector, especially oil marketing companies' stocks. Some respite was also seen on the political front where tensions between Pakistan and the US subsided a bit while the political coalition partners MQM and PML (Q) also re-joined the government.
On economic front, banking sector spreads during August 2011, stood at 7.59 percent, down 29bps on month-on-month basis while up 0.03bps on year-on-year basis as compared to 7.56 percent during August 2010. Tax collected by the FBR went surprisingly up by 27 percent in the first quarter of FY12, though government has set a target to borrow Rs 1.07 trillion in the second quarter to finance its deficit.
Naveed Tehsin at JS Global Capital said that the domestic political uncertainty and concerns over global economic outlook overshadowed recovering US-Pak ties and expected easing in the monetary policy due on October 8, 2011. In the T-Bills auction held during the week, the 3 month cut off yield came in 76bps below the discount rate. Moreover, CPI for
September dropped to 10.46 percent from 11.56 percent in August 2011.
The fertiliser manufacturers raised ex-factory urea prices by Rs 174/bag owing to SNGPL's gas suspension to fertiliser producers due to reduced supply from Qadirpur. Bearing a positive impact on earnings of FFC and FFBL, the stocks gained 5.3 percent and 2.9 percent, respectively during the week. On the other hand, local cotton prices declined by 3 percent due to higher cotton arrivals during September, together with falling international cotton prices due to gloomy world economic outlook.