Like the preceding week, stocks moved in a narrow band at the Karachi stock market in the week ended Friday.

The range bound trading saw KSE-100 index close almost flat with a minor gain of 20 points to close at 16,865 points.

The market witnessed profit taking on the first trading day (Monday) following absence of any positive surprises in the monetary policy and a bit of law and order concerns for Karachi. Analysts said the five per cent cut in discount rate announced by the SBP was already priced into the stocks. Stock brokers, however, complained that the falling rupee was a major concern for investors.

Only a week remaining to the close of 2012, most local institutional investors decided to take profit at the current high levels.

Overseas investors were generally quiet with foreign fund managers remaining on the sidelines, in spite of the splendid performance of capital markets which produced return of 48.6 per cent to-date during 2012.

This placed KSE ahead of major world markets with Thailand and Philippines trailing behind, giving out a return of 34 per cent.

Market capitalisation of KSE edged slightly higher to Rs4.233 trillion, from Rs4.218 trillion at the close of previous week.

Average daily volumes rose two per cent to 138 million shares, from 136 million shares in daily turnover seen the earlier week.

However, the average daily traded value declined four per cent to Rs3.50 billion,  from Rs3.64 billion. Trading in stocks forming the market capitalistion based KSE-30 index accounted for only one-fourth of the turnover, which analysts said, indicated that the investor interest was still tilted towards speculative stocks.

Punters and day traders were seen active all through the week, giving boost to the volume and raising values of second and third-tier stocks.

Several market strategists called for caution as large exposure in such stocks by investors with small means could spell trouble for them, at the market’s current high level.

Foreign investors were seen to have traded on both sides, resulting in a nominal  outflow of $0.14 million over the week. The outflow in the earlier week had stood considerably higher at $3.9 million.

Analysts at brokerage JS Global observed that the telecommunication stocks were under limelight during the week on account of the 3G auction process and International Clearing House (ICH) while textile scrips came up for brisk trading as the textile numbers were released.

The textile exports in November were recorded at $1.0 billion, up by 24 per cent over the same month last year, mainly on account of improved demand for imports from the European Union countries.

Other important news of the week included: November 2012 current account deficit (CAD) clocking in at $638 million, pulling the five-months CAD of the current fiscal to $365 million. The foreign exchange reserves dipped to $13.2 billion, but it was accompanied by talks of release of $700 million under the CSF.

Major gainers during the week included: TRG Pakistan, NIB Bank, Rafhan Maize, Nestle Pakistan, Colgate Palmolive, Shell Pakistan, Indus Motor Company, Pakistan Oilfields, Fauji Fertilizer Bin Qasim, Pak Suzuki Motor, Fatima Fertiliser and MCB Bank.

The big losers during the week were: Grays of Cambridge, Murree Brewery, J.D.W Sugar, Honda Cars, Al-Ghazi Tractors, Sui Southern Gas, Pakistan International Container Terminal and Bata Pakistan.

The three top-volume leading stocks during the week included: TRG Pakistan, Byco Petroleum and Maple Leaf Cement.

Equity trader Samar Iqbal at Topline Securities summed up the trend stating that TRG, Byco Petroleum and small cap cement stocks remained in the limelight during the week. Profit taking was seen in Engro Corporation as no major decision was taken in the ECC meeting for gas restoration to fertiliser plants. On the other hand, investors remained bullish in Fauji Fertiliser and Fauji Bin Qasim as fertiliser off take numbers were thought to be on the rise in the month of December.

Future Outlook: Fertiliser off take data is anticipated to be released next week with the market expecting stronger sales at the fag end of the year. Analysts at AKD Securities predicted, “Broadly speaking, however, with results season still a few months away, the market is likely to focus on political developments and the macroeconomic position, particularly with respect to the rupee/dollar parity”.

The KASB Securities stated in respect of outlook for the future that as the year end was looming and general triggers lacking, volume activity in the main board items was likely to remain subdued even though interest in speculative stocks could remain high. “We assign low chances for any significant portfolio rebalancing in the shortened week ahead”, said the analysts.

Topline Securities pointed out that going forward, futures roll over and lower number of trading days, along with year-end phenomenon was expected to keep local bourse in a range bound territory. —Dilawar Hussain