SHARES at the Karachi stock market remained strong during the week ended Friday, as the KSE-100 index surged by 196 points or 1.3 per cent per cent to close at 15,450 points. The index thus depicted the 53-month high level.

Average daily trading volumes stood at 164 million shares, which was 16 per cent lower compared to the earlier week, showing a slowdown in activity as the market reaches out to its highest-ever level of 15,667 points attained on April 20, 2008.

Much of the gains during the week were made on the last trading day, Friday, but it was mainly due to huge gains in index heavy weight stocks.

Foreign investors continued to show interest in the Pakistani equity market with net purchases of $2.7million worth stocks during the week, compared to net portfolio inflow in the minor sum of $0.4 million the week earlier.

According to analysts at brokerage JS Global, the highlights for the outgoing week included the decision by the FED to launch third aggressive stimulus programme to rescue the US economy; decline of 0.44 per cent in Pakistan’s trade deficit numbers in the first two months of current fiscal compared with the same time last year; cut in export finance scheme rates by 150 basis points by the State Bank of Pakistan, which was thought to be a major relief for the textile industry; the government issuance of Rs82 billion Privately Placed Term Finance Certificates (PPTFC) to OGDC for reduction in the circular debt and finally, Moody’s continued negative outlook on Pakistan banks.

Equity dealer at the brokerage Topline Securities observed that the increase in global equity markets and commodity prices helped local bourse to close 1.3 per cent up on weekly basis.

However, investors remained skeptical amid rising leverage positions and NRO hearings next week, which resulted in decline in volumes by 16 per cent. Telecom sector remained in the limelight following official announcement of International Clearing House (ICH) formation.

While foreign and institutional investors revived the activity in the oil & gas sector, which centered mainly on the heavyweight OGDC, the retail investors continued to be charmed by the second and third low-priced stocks.

Thus, on any given day during the week, five out of ten top volume leaders were penny stocks.

The low-priced dormant telecom stocks had the reason to come up for trading, but small investors also entered some of the stocks without consideration of their earnings growth.

Top five volume leaders during the week were PTCL with volume of 94.3 million shares; KESC 64.1 million shares; Telecard Limited 42.1 million shares; PACE (Pakistan) 41.2 million shares and WorldCall 32.3 million shares.

AKD Research identified the biggest gainers for the week as Nishat Mills, up by 7.3 per cent in stock value; Unilever higher by five per cent; Meezan Bank with gain of 4.9 per cent and the oil &gas sector giant, OGDC up by 4.8 per cent.

The laggards for the week were Shell (Pak), down by 6.9 per cent and the PTCL which tumbled by 6.7 per cent, as investors were disheartened by the company’s omission of payout despite better-than-expected third quarter results.

Other big gainers, identified by a major brokerage house included: PIAC (A), Pak Cables, KESC, NetSol Technologies and Media Times Limited.

The big losers included Ghani Glass, Shell Pakistan, PTCL, Engro Polymer and Al-Ghazi Tractors in the benchmark KSE-100.

Outlook for the Future: The results reporting season was almost over with just a couple of high profile companies, Pakistan Oilfields, Attock Petroleum and Nishat Mills still to announce the financial numbers.

Activity was therefore thought to remain choppy in the upcoming week. Investors may also prefer to remain on the sidelines due to the judicial hearing in NRO cases, scheduled for Sep 18.

Trading activity was also likely to slow down as the index is doddering at the dizzy height. Most market strategists therefore, called for caution.—Dilawar Hussain