A dull week on KSE

KARACHI (November 24 2008): Uncertainty over the removal of floor mechanism on share prices kept the investors totally at the sidelines throughout the week and the Karachi share market witnessed lowest ever trading volume during the period.

Some select buying on the last trading session supported the benchmark KSE-100 index to inch up by 3.01 points to close at 9,187.10 points level.

The market witnessed the lowest ever trading volume of only 19,660 shares on Tuesday. However average daily volume slightly increased to 95,972 shares as compared to previous week's average of 69,244 shares. The overall market capitalisation declined by Rs 1.520 billion to stand at Rs 2,826.213 billion.

The foreign investors remained net sellers and withdrew $4.409 million from the country's equity market during the week. The index remained unchanged in the first four trading sessions of the week, however, a slight increase of 3.01 points was witnessed on the last session on the back of investors expectations regarding availability of Rs 20 billion market stabilisation fund.

"The share market witnessed lowest ever volume of only 19,600 on November 18, 2008, breaking the record of 24,500 made a few days back", Romessa Mirza, an analyst at Invest Capital & Securities said.

The listlessness in the market is exemplified by the fact that a mere 32 scrips were traded throughout the week. On the regulatory front, the formula for determination of the closing price of scrips has been changed, and now the average price of the last 30 minutes of a trading day will be considered as the closing price, as opposed to the last tick, thus curbing price manipulation. It has been over six weeks that futures' volume has been nil. Investors are not optimistic about any significant improvement in the near future, due to which they are completely abstaining from taking fresh positions, Romessa added.

Atif Zafar, an analyst at JS Global Capital said that the outgoing week was one of the most dismal in the history of the KSE as daily record low volumes were registered at the cash counter amid uncertainty about the removal of price floor. However, he said, that the off-market average daily volumes witnessed a significant increase of 106 percent with average discount in off-market increasing to 31 percent.