KSE in bear country - Weekly Report

KARACHI: Fears of taxation on the capital market called the bears back to the exchange as due to the selling by both foreign and local investors key index of the exchange shed more than 5 per cent during the week ending below 7,000 levels.
The benchmark KSE 100-Index dropped 382 points - 5.25 per cent -- to end at a level of 6,894 points.
"Issues regarding the budget was the main factor for the negative activities; difficulties faced by members for funding and no decisive victory achieved by the government in Swat also were the reasons for the bearish spell," said Tanvir Abid, SVP Elixir Securities.
Tanvir added that lackluster activities would continue in the market and the Index could go down to 6,700 levels, however bulls might come back if the budget is investor friendly.
Bears were there since the start of the week as on Monday Index ended 66 points down mainly due to the taxation fears however there were some positive activities during intra-day trading due to foreign buying, hopes that military action would end soon and inclusion in MSCI index therefore at a moment Index touched its highest level of the week of 7,328 points.
Tax worries didn't stop to hurt the market and the Index dropped another 85, 135 and 111 points respectively during the next three days. Adding to the pressure was the absence of leverage tools, foreign selling, downward revision of the growth numbers etc.
However week ended with some improved performance as on Friday despite heavy selling by foreign investors market closed with little gains mainly on buying by local investors in an oversold market. There were also some negative activities in the market during intra-day trading where at a moment Index touched its lowest level of the week of 6,850 points. Foreigners too preferred to take an exit from the market as there was a net foreign selling of $11.9 million during the week.
KSE 30-Index fell by 548 points - 6.98 per cent -- to close at 7,314 points and KSE all-share index lost 263 points - 5.05 per cent -- to close at 4,953 points.
Investors' participation remained low throughout the week as around 555 million shares traded in the market which is 201 million shares less as compared to a turnover of 756 million shares a week earlier.
Out of total 368 active issues, 282 declined and 75 advanced while 11 issues remained unchanged.