KSE investors to focus on meetings with IMF

KARACHI: Focus of investors at the Karachi Stock Exchange (KSE) will shift to the meetings between the International Monetary Fund (IMF) and Pakistani officials, since most large companies have already announced their results, dealers said.

“As the result season is coming to its close, investors will look towards new triggers, particularly on economic and political front,” said Saeed Khalid, an analyst at Invest Capital. “Moreover, the upcoming Eid season is expected to drain the investment from the market, but foreigners’ interest will play a key role for the market to sustain the current levels.”


The KSE 100-share index was down by 54 points at 10,598 at the end of the week. This was the first weekly decline after four consecutive weeks of gains, as investors chose to book profits after results announcements.

Sana Hanif, an analyst at JS Global, said majority of the heavy weights announced their earnings for the September quarter in the outgoing week. “Interestingly, despite improved investor interest as evident from encouraging weekly average volumes of 133 million shares, the market closed in the negative.”

The State Bank of Pakistan (SBP) provided an assessment on Pakistan’s economic performance in FY10 in its annual report and gave estimates for the current fiscal year. In the wake of floods, the central bank lowered its GDP growth estimate to 2-3 percent, increased inflation forecast to 13.5-14.5 percent, raised fiscal deficit estimate to 5-6 percent and lifted the current account deficit forecast to 3-4 percent.

Besides, the SBP convened a meeting with commercial banks for recovering written-off loans. Although details on the recovery process have not been disclosed as yet, the move is likely to have a favourable impact on the banking sector stocks, analysts said.†The index movement during the week was dominated by results of major blue-chip items including OGDCL, NBP, PTCL, FFCL and Attock Group, they added.

In addition to the result season, there was a tug of war between positive and negative news flow on the economic front. IMF’s regional economic outlook report and upward revision in flood damages estimate by WB and ADB roped in the investors’ optimism, but on the other hand the news about the coalition support fund stimulated investors’ confidence, analysts said.

Open interest position during the week increased by a massive 71.8 percent to Rs1.6 billion. Futures spreads rose by 14 basis points to 2.97 percent, while futures volumes stood at 4.6 million shares, increasing by 91 percent.

The top-five scrips constituting 54 percent of the total open interest were NML, PSO, POL, ENGRO and MCB. Foreigners turned net sellers with sale of equities worth $2.8 million during the week. Companies and banks were net buyers.