KSE rises 1.8% as investors rush towards the market
The benchmark KSE-100 share index rose 1.8 per cent in the short four-day trading week.
KARACHI:
Fresh from a long weekend, investors rushed to the Karachi Stock Exchange (KSE) during the week as volumes more than doubled against the preceding week.
The benchmark KSE-100 share index rose 1.8 per cent in the short four-day trading week. The market was closed on Monday on account of Eid.
The week opened with positive news about the margin trading system which resulted in average daily volumes surging to 89 million shares compared with 38.9 million shares from last week.
However, volumes dropped on the final trading day to 67 million shares following the assassination of a senior leader of the Muttahida Qaumi Movement (MQM) in London.
Moreover, Pakistan finally received its emergency loan of $451 million from the International Monetary Fund (IMF) under the Emergency Natural Disaster Programme (ENDA) during the week.
Foreigners were net buyers of shares worth $5 million during the week while banks emerged as sellers, offloading shares worth $8.8 million, informed JS Global Capital analyst Mustufa Bilwani.
SECP approves concept paper
The Securities and Exchange Commission of Pakistan (SECP) approved a concept paper for the margin trading system for equity trading at local stock exchanges during the week, although the final product will contain certain additional risk mitigating measures. Details for the product however remain unclear and reports suggest a time period of one to three months for the launch of the product, said Bilwani.
IMF approves emergency funding
The IMF’s executive board approved $451 million under the ENDA. Moreover, in an official communication to the IMF, Pakistan’s economic managers highlighted the difficulties being faced after the flood, with both the GDP and the fiscal deficit expected to be worse than initially projected.
Nevertheless, officials remain committed to meeting the IMF conditions, which include a 10 per cent income tax surcharge, implementation of the reformed general sales tax and dismantling the Pakistan Electric Power Company (Pepco).
Remittances: Saviour in disguise
Remittances rose by 11 per cent on a yearly basis to $933 million in August. The increase is undoubtedly welcome under the current scenario, according to BMA Capital.
However, the increase should not be considered a permanent feature for the economy given that some of the inflow can be attributed to charitable donations in light of recent floods and Eid related inflows, highlighted BMA Capital.
Outlook
The market activity and outlook in upcoming days will be highly dependent on the outcome of negotiations with the IMF, according to the BMA Capital research team.
Published in The Express Tribune, September 19th, 2010.
Fresh from a long weekend, investors rushed to the Karachi Stock Exchange (KSE) during the week as volumes more than doubled against the preceding week.
The benchmark KSE-100 share index rose 1.8 per cent in the short four-day trading week. The market was closed on Monday on account of Eid.
The week opened with positive news about the margin trading system which resulted in average daily volumes surging to 89 million shares compared with 38.9 million shares from last week.
However, volumes dropped on the final trading day to 67 million shares following the assassination of a senior leader of the Muttahida Qaumi Movement (MQM) in London.
Moreover, Pakistan finally received its emergency loan of $451 million from the International Monetary Fund (IMF) under the Emergency Natural Disaster Programme (ENDA) during the week.
Foreigners were net buyers of shares worth $5 million during the week while banks emerged as sellers, offloading shares worth $8.8 million, informed JS Global Capital analyst Mustufa Bilwani.
SECP approves concept paper
The Securities and Exchange Commission of Pakistan (SECP) approved a concept paper for the margin trading system for equity trading at local stock exchanges during the week, although the final product will contain certain additional risk mitigating measures. Details for the product however remain unclear and reports suggest a time period of one to three months for the launch of the product, said Bilwani.
IMF approves emergency funding
The IMF’s executive board approved $451 million under the ENDA. Moreover, in an official communication to the IMF, Pakistan’s economic managers highlighted the difficulties being faced after the flood, with both the GDP and the fiscal deficit expected to be worse than initially projected.
Nevertheless, officials remain committed to meeting the IMF conditions, which include a 10 per cent income tax surcharge, implementation of the reformed general sales tax and dismantling the Pakistan Electric Power Company (Pepco).
Remittances: Saviour in disguise
Remittances rose by 11 per cent on a yearly basis to $933 million in August. The increase is undoubtedly welcome under the current scenario, according to BMA Capital.
However, the increase should not be considered a permanent feature for the economy given that some of the inflow can be attributed to charitable donations in light of recent floods and Eid related inflows, highlighted BMA Capital.
Outlook
The market activity and outlook in upcoming days will be highly dependent on the outcome of negotiations with the IMF, according to the BMA Capital research team.
Published in The Express Tribune, September 19th, 2010.