Negative trend witnessed

Last week saw Karachi stocks depicting a negative trend with benchmark KSE-100 index shedding 0.2 percent to close at 35,741.52 points. The daily trading turnover also remained southward and ended the week on average at 403 million shares, down by a massive 37 percent. The average daily value of the stocks traded during the week under review also settled in red and depleted by 21 percent at Rs 12.8 billion or $126 million.
Sector-wise, major gainers were from industrial transportation with 8.3 percent increase, software and computer services 6.1 percent and life insurance 5.5 percent.
Those lost in value included real estate investment and services sector which shed 16.3 percent, media 4.9 percent and financial services 4.4 percent during the week under review.
This depressing aura prevailing in the local bourse did not, however, permeate borders, said equity analysts at Arif Habib Limited Research. The foreign investors made net buying of $3.03 million compared to net selling of $7.92 million in the preceding week.
With banking stocks attracting a largest $2.6 million chunk of foreign inflows, the power sector braved outflows worth $1.3 million.
Local mutual funds offloaded portfolios valuing $11.9 million.
While Topline analysts attribute the bearish week to futures rollover, their counterparts at Arif Habib Limited Research cite a host of factors for what they said a soft market trend. The sentiments of risk-averse investors, the market observers believe, were weakened by profit-taking in small cap stocks, below par earnings for the FFC and EFOODS, lower-than-expected cement dispatches for July 15, future roll-over week and newly-announced analyst regulations by the Securities and Exchange Commission of Pakistan.
"A few positives, such as the CSF inflows of $337 million and foreign interest in oil stocks dulled the overbearing negative impact," they added.
Consequently, the analysts said, KSE-100 fell by 0.2 percent WoW.
The week in question witnessed major developments like: declining oil imports, down 21 percent YoY in FY15, WHR plant of a cumulative 13.5MW inaugurated by the BWCL, textile exports down 1.9 percent YoY in FY15 (3.8 percent MoM in June-15), approval granted to listed companies to purchase their own shares (treasury stock) and sell them in the market at appropriate time compared to earlier when shares once purchased were cancelled, thus were not allowed to sell, and the government to possibly maintain POL prices at current levels through higher taxes despite Ogra's recommendation of 3-10 percent cuts.
The analysts expect the country's largest bourse to possibly recover this week. Major stimulants they cited included oil price recoveries, upcoming CPI numbers and continued progress into the results season.