Karachi Share Market Sentiment Lifts Amid Security in Muharram

Strategic Insights -

The Karachi share market is likely to exhibit a positive sentiment in the upcoming week due to the government's success in ensuring security during the Muharram mourning processions. This development, combined with the approval of the Reformed General Sales Tax (RGST) and the sale of British Petroleum's (BP) assets to United Energy Group (UEG) for $775 million, is expected to impact the index movement. The market's positive sentiment was also driven by buying in oil and gas and banking stocks during the week ended December 15, which was shortened to three working days due to Ashura holidays.

Key Takeaways:

  • The Karachi share market is expected to lift its sentiment in the upcoming week due to improved security during Muharram.
  • The approval of RGST is expected to garner interest given its impact on the International Monetary Fund (IMF) tranche.
  • Buying in oil and gas and banking stocks kept the market sentiment positive during the week ended December 15.
  • The sale of British Petroleum's assets to United Energy Group for $775 million heightened interest in the oil and gas sector, leading to a 2% gain in the last trading session.
  • The share price of United Bank Limited (UBL) gained 2% due to the Abu Dhabi Group's consideration of offloading its strategic stake in UBL.
  • The market gained 166 points to close at 11,786, with average daily volumes declining to 148 million shares, lower by 19% than the previous week's average.
  • Remittance data showed an 8% increase in inflow to $927 million in November 2010, taking the total for the first five months of the fiscal year up by 16% to $4.4 billion.
  • The trade gap ballooned to $1.6 billion in November, with imports increasing faster than exports.
  • Foreigners continued their buying spree, with net investment of $22.6 million in just three days, and the highest single-day foreign investment since September 1, 2009, of $19.5 million.

Statistics:

  • $775 million: Sale price of British Petroleum's assets to United Energy Group.
  • 2%: Gain in the oil and gas sector in the last trading session.
  • 2%: Gain in the share price of United Bank Limited.
  • 166 points: Market gain.
  • 11,786: Closing market price.
  • 148 million shares: Average daily volumes.
  • 19%: Decline in average daily volumes compared to the previous week.
  • $927 million: Increase in remittance inflow to 8% in November 2010.
  • $4.4 billion: Total remittance inflow for the first five months of the fiscal year, up by 16%.
  • $1.6 billion: Trade gap in November.
  • $22.6 million: Net foreign investment in three days.
  • $19.5 million: Highest single-day foreign investment since September 1, 2009.

Sources:

  • KASB Securities research report.
  • Rabia Tariq, analyst at JS Global.
  • Karachi Stock Exchange (KSE) market data.