The stock market witnessed a strong week amid foreign buying worth $10.8 million, almost triple the amount bought in the preceding week.
“The kick start of the result season and Securities and Exchange Commission of Pakistan (SECP) announcement regarding CGT rules and demutualisation kept investor interest intact during the week,” said JS Global Capital analyst Naveed Tehsin in a research note.
The market rallied strongly in the first three day while profit selling was witnessed in the last two sessions. The benchmark KSE 100-share index gained 232 points or 1.6% to close at 14,564 points on a weekly basis.
SECP Chairman Muhammad Ali announced that the CGT rules for the stock exchanges would be finalised within the next two weeks and its collection would start after a month. The proposal to allow intraday short selling is also under consideration, however, blank sale will not be allowed.
Moreover, Standard & Poor’s Ratings Services affirmed Pakistan’s sovereign long-term rating and upgraded the short-term rating.
Average daily volumes surged by 28% to 122 million shares. The upcoming week is expected to witness a downfall due to the annual Ramazan affect.
Engro Corporation remained in the limelight on the back of news flow that Engro Fertilizer has approached financial institutions for lengthening maturities of its long-term loans. The local giant has to payoff loans worth Rs22 billion in the current financial year.
MCB Bank remained highly sought after news flow that the bank plans to open three branches in India.
Outlook for the Future
With the onset of the Ramazan, seasonally lower activity could be seen, however, given the jam-packed nature of the upcoming result calendar, the bourse is expected to keep bustling, according to a KASB Securities research note. For politics on the other hand, next week is critical, the initial hearing challenging the passage of the Contempt of Court Bill is scheduled for July 23 followed by Round II of the NRO saga on July 25 where the PM’s stance on writing a letter to Swiss authorities will be put forward.
Published in The Express Tribune, July 22nd, 2012.