KSE Weekly Report: US-Pak unsettled issues cause outflow of $6m

By Shahid Abbasi May 20th, 2012 ( No Comment )

Karachi: The Karachi Stock Exchange remained lackluster in the closing week with shaky investor confidence as developments on Pak-US relations in line with resumption of NATO supplies failed to get settled.

The foreigner’s interest seems to be tamed-off at KSE as net outflow of $6.01 million was witnessed compared to net inflow of $3.32 last week. The daily traded value also declined by 46 percent WoW to $65 million compared to $120 million last week.

Meanwhile, the approval for issuance of Rs82 billion TFC from Cabinet Committee to bridge circular debt was also prudently welcomed by market participants but with low technical support that drove KSE-100 to go downward with 373 points on week-on-week basis, closing at the level of 13,858 points.

The trading activity remained on lower side as daily average volumes botch down by 45 percent WoW to 144 million shares compared to 261 million shares witnessed last week.

In T-bill auction, conducted during the week, yield remained stagnant at previous level as government fetched Rs 143 billion in the auction, while 80 percent of the interest was seen in 3 months bills.

On global front, MSCI restricted the Pakistan status ousting Habib Bank Limited from the MSCI frontier index while also decreasing the Pakistan representation to 4.4 percent from 4.7 percent previously.

On corporate side, auto sector performance stood stellar as sales grew by 14 percent to 143,374 units in July to April, whereas budgetary proposal for providing 100 percent capacity charge to Independent Power Producers also caught investor’s interest.

On economic side, the external account picture seems quite depressing as Current Account deficit reached $3.3 billion in July-April period compared to surplus of $466 million last year, whereas FDI also dropped by 48 percent YoY to $667 million in 10MFY12.

The market is expected to maintain the range bound activity in next week while developments on resumptions of NATO supply and domestic political situation will set the trend in the market.