Karachi Stock Exchange remains range-bound
Karachi Stock Exchange: Because of protracted Eidul Fitr holidays trading activities at the Karachi stock market remained dull. Interestingly during these holidays the lowest turnover in the trading history of the market was made a formal record on account of prudent approach by the investors provoked by decreasing rupee value. This opinion was given by professional analysts.
It's worth noticing that there are some other crucial factors, that affected the market in so negative way. For example, dropping foreign exchange reserves, increasing current account deficit and foreign selling because of weaker rupee value.
As a result the Karachi Stock Exchange 100-share index went down by 2.53 points to close at 9,1179.68 points as compared with last week’s 9,182.21 points.
The medium turnover volume dropped to 0.985 million shares as compared to 2.477 million shares traded during last week.
A famous and authoritative Analyst at JS Global Securities Farhan Rizvi noted the latest decision by US Congress to suddenly refuse the $700 billion bailout package has sent shock swings with a sharp downfall in major international stock markets.
Therefore, Pakistan’s valuation regarding regional market has not changed as the current discount of 30 % is in line with historical trend. Actually this fact says that for foreigners in the market may not be very tempting in spite of the great erosion in local share rates.
Furthermore, with the international markets being aware of a sharp dip upon news of the refusal of $700 billion bailout package (powerful Asian markets down 35 % in initial trades) fall in emerging market is going to double.
Analyst at Shahzad Chamdia Securities Ahsan Mehanti commented on the topic of bearish trend of the market while the terminating week: 'selling pressure kept to move on as international equity markets sink into historically low levels as the United States bailout plan was declined.
An obvious predominance of indeterminacy proceeded over funding of capital markets by SBP and discharge of funds by ‘Friends of Pakistan’ as investors remained worried about down-grade to negative outlook on bonds and currency by Moody's Investors Service and Standard and Poor's Corporation.
Analysts pointed out that the stock market is going to remain languid next week, because it's obvious there are no let-up in investors’ trust.
Foreign investment is being on its falling trend while local investors, witnessing foreign ones, have also hold a careful approach.
Unfortunately, the main future volume of the market was the worst this week if compared to the last one week, as the medium future market volume is at 0.258 million shares if compared to 2.92 million shares. As far as market capitalisation is concerned it stood near Rs 2.848 trillion.
Foreign investors are putting the trend at the equity market. It has become an evident thing because of the fact that investors don't rely on fresh long-term investment.
To sum up the current market will be improved in case if the economic, law and order situations in the country are improved as well.
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