KARACHI: Contrary to public sentiment, experts and analysts believe that the temporary arrest of Muttahida Qaumi Movement (MQM) chief Altaf Hussain will not decide the future trends of the Karachi Stock Exchange (KSE).
The budget 2014-15, scheduled to be announced today, coupled with the possibility of further action against the MQM chief, would however impact the performance of the bourse, analysts believe.
KSE-100 shares index shed almost 800 points in initial response to the arrest of MQM top leader. However, the market started to rebound after a short span of time, owing to a fresh spree of fund buying. Trading volume, once down to 111 million shares, jumped back to 185 million shares within 30 minutes.
The market witnessed mixed trends and fluctuated around 29,354 points.
Also read: Altaf Hussain arrested for money laundering
Business Tycoon Akeel Kareem Dhedhi told Dawn.com that the capital market enjoyed the advantage of positivity brought by fund buying.
“Budget-2014-15 and other factors would decide the future trend of the local bourse. In my opinion, upcoming days would be positive for the capital market as KSE has enough potential to reject the negative impacts of the temporary arrest of Altaf Hussain,” added Dhedhi.
Zafar Moti, a senior broker and former director of the KSE, was hopeful of positivity in the near future. He added: “Decline of 800 points in the capital market was only due to initial panic which was coped by the buying trend introduced subsequently.”
Samar Iqbal, Topline Securities (Pvt) Ltd Assistant Vice President and analyst on capital market, said the initial decline at the bourse was of no significance. “However, the stock exchange would only be affected if MQM showed a severe reaction against the arrest of its chief,” she said.
