Investors get bullish as foreigners return

DESPITE a massive mid-week jolt caused by some external factors, Karachi share market maintained an optimistic outlook as the nation is inching towards a full democracy and people's rule.

By A Correspondent

Published: Mon 24 Mar 2008, 8:44 AM

Last updated: Sun 5 Apr 2015, 1:22 PM

The maiden session of the popularly elected assembly, the election of speaker and deputy speaker points to a transition after the nomination of the leader of the house possibly by the next week would complete the transfer of power to the newly elected parliament.

After falling at one stage to week's lowest at 14,726.54,the KSE 100-share index managed to finish partially recovered at 14993.87, off 93.60 points, but indicated that it could rise further during the next week on the strength of heavy fresh buying in the oil shares followed by reports of new oil finds and the cement sector on higher exports.

The crash of the foreign markets followed by a rebound amid fears of US recession, the Bear Streans episode, and its subsequent sell-off and the US discount rate cut did took its toll but local positive factor again put the market back on the rails.

There is a loud whispering in the KSE corridors that re-entry of foreign investors (FIs) by the next week could not be ruled out and that could give the needed boost to shares on selected counters and in turn to the broader market.

The opening was on the higher side as the market welcomed the new popularly elected assembly as was reflected by sharp increase in the KSE 100-share index but the initial enthusiasm could not be maintained on the perception that the new government will inherit a host of economic and financial problems and there could be possible jolts in the coming months on the issue of monster of inflation.

However, long-term economic perceptions are fairly bullish on the belief that the sailing would be smooth after initial challenges were met by the strong coalition governments both at the centre and the provinces, most analysts hope.

Fresh active short-covering in Engro Chemical, PSO, Pakistan Oilfields and some others limited the fall in the index despite active profit-selling in Bank of Punjab, OGDC, and Arif Habib Securities. “Amid fears of a possible standoff in the transfer of power, investors mostly take calculated forward positions as heavy financial risks are entailed to them, “said a broker adding that is” what exactly the maiden oath taking session of the new parliament witnessed”. There is a loud whispering in the corridors of the bourse that the presidency and the new government could hardly co-exit owing to their respective rigid positions on some of the issues, which may lead to a standoff, some analysts fear and this may lead to absence of foreign investors who are now planning to re-enter the market.

“There could be jolts here and there including the nomination of the future prime minister but I don't foresee any major split in the ruling parties as the dissenting voices are too weak to score a point in the existing context”, said a leading stock analyst. But investors are expected to play safe and will not speculative trading atleast the new setup led by a strong prime minister is in place at the centres, he added. The weakness of the cement sector on active selling weighed heavily against the underlying sentiment as leading among them notably Lucky Cement and D.G.Khan Cement came in for selling at the higher levels.

More news from Business
Luxury vrooms again


Luxury vrooms again

This year the #NoFilterDXB witnessed a dazzling array of replica vehicles from some of Hollywood’s most classic movies and TV shows.

Business2 days ago