The Karachi share market witnessed bearish trend during the week ended on November 19, 2011 due to selling by both local and foreign investors due to concerns over prevailing political situation in the country. The KSE-100 index declined by 101.12 points and closed at 11,937.81 points.
Trading also remained low and the average daily volume at ready counter declined by 6 percent to 41.54 million shares as compared to previous week's 44.20 million shares. Market capitalisation declined by Rs 31 billion to Rs 3.104 trillion.
Foreign investors remained on the selling side and withdrew $1.3 million from the local equity market as compared to net inflows of $2.1 million of the previous week.
On Monday, the market opened under pressure and the index declined by 30.45 points to close at 12,008.48 points with volume of 39.566 million shares. On Tuesday, the index lost 14.47 points to close at 11,994.01 points with 49.272 million shares.
On Wednesday, the index lost 1.24 points to close at 11,992.77 points with 51.34 million shares. On Thursday, the market witnessed bearish session and the index declined by 79.35 points to close at 11,913.42 points with 28.661 million shares.
On Friday, the index recovered 24.39 points on the back of investors' interest on dips and closed at 11,937.81 points with 38.838 million shares.
Yawar uz Zaman, an analyst at InvestCap, said that despite significant discovery in Nashpa-2 by OGDC, the market remained in a consolidation phase and investors preferred to stay behind the window and wait for more triggers when they could take fresh entry. Negativity was fuelled by some economic numbers where government was still unsuccessful to permanently solve the circular debt issue that reached an alarming level of Rs 665 billion to date. At the same time, non-performing loans of banking sector also crossed Rs 600 billion mark in the third quarter of CY11. Furthermore, foreign portfolio investment also shrank by 58 percent in Jul-October to stand at $238 million.
However, inward remittances were reported to be up by a solid 23 percent to $4.3 billion in Jul-October period that supported the rupee. Furqan Ayub at JS Global Capital said that investors at the bourse remained nervous throughout the week as political uncertainty rose sharply.
He said that new discoveries and high oil prices created interest in the E&P sector with POL and OGDC outperforming the market by 2 percent and 1.2 percent, respectively. Among the fertiliser stocks, FFC underperformed the market by 6.1 percent as investors' feared reversal in fertiliser prices on news of restoration of gas to the fertiliser sector.