Investors' preference to trim their positions days before the end of fiscal year 2015 kept the Karachi shares market in red during last week. Benchmark KSE-100 index contracted by 642 points or 1.86 percent to 33,885 compared to 34,526 of preceding week.
The average daily trading volumes stood at 358 million shares, down 22 percent in the shorter sessions in Ramadan. Major chunk of the activity was witnessed in second and third tier stocks.
Major losers recorded were from sectors like tobacco which declined 6.2 percent, oil and gas 5.6, telecommunication 4.6 and chemicals 3.1 percent. The banking scrips were seen marking some gains, one percent, during the review week.
The daily trade value also averaged down by 18 percent to Rs 11 billion, $108 million in dollar terms.
The foreign investors appeared as net sellers of portfolios. The foreigners of and local mutual funds were major net sellers of $16.1 million and $14.0 million respectively. While the local banks bought positions worth $1.8 million.
Sector-wise, major net selling was observed in sectors like chemicals (US $5.2mn), Power Generation & Distribution (US $5.2mn) and Oil & Gas (US $2.8mn). However, net buying by foreigners was seen in textile (US $0.9mn).
"Investors preferred to trim their positions close to the June year-end." said analysts at Topline Research. JS analysts observed that the KSE-100 index ended the week in a bearish mode as the futures rollover week kept liquidity low in the market, while domestic politics too kept investors a bit jittery.
"The trading at local bourse started with a dull mood this week. The investors remained cautious and sidelined for most part of the week," viewed equity analyst Abdul Azeem.
He said rising political noise and higher capital gains tax also contributed in the dismal performance of the index.
Furthermore, with start of future roll over week the bearish sentiments prevailed throughout the week.
The investors booked profits on their positions amid lack of any optimistic triggers and ahead of end of the financial year.
Moreover, lower oil prices in the international market also affected the heavy weights of the index due to which oil stocks exerted a downward pressure on the index throughout the week.
The starting of the holy month of Ramadan has also slowed down the activity as the trading hours shrank, said Azeem.
In terms of performance, cement sector remained strong due to expectations of higher off-take going forward on increase in PSDP allocation in the budget, while BYCO (+15% WoW) continued its euphoric rise on the back of inauguration of its new refinery. Meanwhile, as global oil prices stabilise, lack of interest was seen in the oil and gas stocks like PSO, POL and PPL.
Other key highlights of the week were: IMF board meeting on June 26th to approve US $506mn tranche, gold dropping to over four-year low in Pakistan, oil imports declining by 20% YoY in 11MFY15, agri credit disbursement rising by 31% YoY in 11MFY15, cut-off yields on T-bills rising by up to 15bps in latest auction, and CCP beginning inquiry against Indus Motor (INDU) and Pak Suzuki (PSMC) into possible anti-competitive behaviour.
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