KSE rises 5.34pc in week on positive news

KARACHI: Upward revision in sovereign credit rating of Pakistan by world renowned Standard & Poor’s, and discovery of new crude oil reserves by large listed companies together kept the stage set for bull-run on the Karachi bourse this week.Breaching through the psychological barrier of 8,500 points successfully on weekend, the KSE 100-share Index posted a significant increase of 5.34 per cent or 433.28 points on weekly basis and closed at 8,541.22 points.The parallel running junior 30-Index augmented by 6.92 per cent or 594.78 points and concluded at 9,187.48 points.The upgrade of one notch in Pakistan credit rating (from CCC+ to B-minus) by Standards & Poor’s drew full attention of overseas investors towards local bourses this week, as the two other popular international financial service providers i.e. Morgan Stanley Capital International Barra (MSCI Barra) and Moody’s had already convinced foreign investors to stage comeback here by changing their outlook to stable from negative for the four Pakistani origin banks last week, analysts said.The foreign portfolio investors, therefore, injected more fresh funds worth $23.80 million (i.e. Rs1.94 billion) in this single week (Aug 24-28), which was significant in size too.Beside this, investors in world markets also gave their due attention to Pakistani bonds, as improvement in local economic indicators helped bonds in world markets to recover their price, according to observers.The movement by foreigners convinced locals to come forward and pour a huge capital around Rs114 billion into the bourses.The market witnessed a net inflow of Rs116 billion, combined of foreign and local, this week and projected the overall market capitalisation to Rs2,501 billion. Besides improvements credit rating and banks outlook the discovery of new oil reserves by three listed Exploration & Production (E&P) companies i.e. Oil & Gas Development Company (OGDC), Pak Petroleum (PPL) and Pak Oilfields (POL) in different oilfields during the week attracted investors from all walks of life to stage aggressive comeback.Joining of market by different investors’ segments is evident with a sharp increase of 34.6 per cent in average daily turnover (ready board) to 160.04 million shares this week from 118.87 million shares traded last week.Activities in future market was also seemed improving, as average daily turnover in this market also improved to 2.56 million shares this week.Besides leading banks and E&P Companies, the Oil Marketing Companies (OMCs), Independent Power Producers (IPPS) and refineries also invited attention of market players owing to speed-up of government’s effects to resolve their circular debt issue by end of this month i.e. August. To resolve this debt issue, government is in negotiations with banks to issue Rs100 billion Term Finance Certificates (TFCs).In the middle of the week, a couple of international financial institutions pointed out local broses as cheap in the region. They said that prices of various shares were still standing lucrative while announcement of dividends and other entitlements by them during current corporate result season were attractive too. This statement did also play its part in placing market to sensitive level.The news of increase in rate of treasury bills (improved between 22-103bps) and failure of authorities to reach an agreement on introducing margin financing effected market slightly in the middle of the week, but other investment-friendly news kept investors fully charged and determined to invest here, said an analyst.Going forward, if foreigners continue to remain net buyers in the session to come and economic and stocks fundamentals move further up then market may rise beyond current sensitive levels, otherwise, it might go into the consolidation phase, analysts said.The developments regarding introduction of a leverage production; either modified Continuous Funding System or Margin Financing, and coming up of inflationary numbers are believe to set direction of market in near future. Movement in Weekly Volume LeadersSymbols Opening on Close on DifferenceMonday (Rs) Friday (Rs) (Rs)AH Securities 30.81 33.27 2.46Azgard Nine 26.18 26.45 0.27Bank Al-Falah 11.84 11.62 -0.22DGK Cement 34.2 35.32 1.12JS Company 24.09 25.07 0.98Lucky Cement 73.21 73.75 0.54MCB Bank 174.27 197.24 22.97National Bank 64.38 67.77 3.39Nishat Mills 44.6 46.73 2.13O.G.D.C 95.09 103.71 8.62P.T.C.L 19.97 21.74 1.77Pak Oilfields 174.07 205.56 31.49Pak Petroleum 191.46 214.67 23.21Pak.PTA 3.07 4.48 1.41