KARACHI, Oct 29: Pakistan’s capital market posted mixed performance during the year ended June 30, 2001, represented by drop in the value of equities but encouraging movements in the corporate bond market.

The SBP Annual Report for financial year 2001 notes that the benchmark Karachi Stock Exchange’s KSE-100 index shed 10.1 per cent during the year — starting the year at 1520.7 and closing at 1366.4 points. “This downturn can be attributed to a host of factors including the lack of concrete progress on privatization, uncertain investor confidence, the continuous depreciation of the rupee and friction between SECP and the bourses”, the report stated.

Primary market activities at the KSE remained slow with only four new companies with paid-up capital of Rs3.6 billion coming up for listing during the year. Similarly, only two companies were floated on the Lahore Stock Exchange, of which Hubco was already subscribed. The LSE index shed 26.5 per cent to end the year at 273.2 points.

The report mentions that the dividend declaration record of companies listed at the KSE “showed no significant improvement over last year”. A table reveals that total of 471 companies made announcements in respect of cash/bonus/right issues, which was only one company more than 470 who had made such announcements the previous year.

Cash dividends were declared by 368 companies, down from 398 companies who disbursed cash in 2000; bonus shares were issued by 72 companies compared with 48 last year and 31 companies asked shareholders for cash in right issues, against 24 companies who had made the cash calls in 2000.

The report points out that the domestic corporate debt market remained bullish following last year’s reforms. Most prominent were changes in National Saving Schemes (rationalizing rates and banning incremental institutional investment), and the launch of the Pakistan Investment Bonds (PIBs). “In addition, the bearish trend in equity market shifted investors towards more secure investment in Term Finance Certificates (TFCs)”, the report said.