KSE remains flat on political instability

KARACHI - The Karachi stock market remained flat during trading session on Monday, following a bearish activity with thin volumes on limited institutional and foreign interest. Yesterday, the Karachi stock Exchange 100-index slightly increased by 0.13 points to close at 12,045.38 level while the KSE 30-index down 33.84 points or 0.22 per cent and closed at a level of 11,769.62. The Karachi stock Exchange 100-index had ended 12,045.25 points on Friday. Volumes rose to 77.05 million shares against 68 million shares traded while market capitalisation stood at Rs3, 237.62 billion or $37.84 billion. Total ready market value recorded at Rs2.57 billion or $29.99 million, KSE trading figures said. According to a KSE report, future volume came at 3.86 million shares, value at Rs330.88 million, showing the spread of 10.86 per cent. Investors remained cautious yesterday about the recent catastrophe in Japan and deteriorating geopolitical situation in the Middle East and Libya. Despite major earnings announcements, rising law and order concerns in the city, political uncertainty and fall in international oil prices being traded near $99 a barrel kept investors vigilant throughout the trading session yesterday. Sell through offshore channels forced the resisting locals on the back foot, the rising judico-political temperature and law and order issues certainly added to the nervousness, already on the higher side due to various macro issues from both within and external circles of the orbit, said a market analyst. Availability of leverage funding somehow kept the momentum positive. The ready board leverage product did invite interest of the local participants, he said adding that volatility on macro, economic, financial, law and order, political and diplomatic fronts kept the cautious stance alive, thus allowing the index to sustain psychological 12000, despite all odds. Diffusion in judicio-political, and political temperatures, ability of the government to address the ailing economic and financial situation without triggering social and political up rise on likely issues of imposition of new taxes and various proposals likely to increase pressure on inflation, set as a pre-requisite for release of remaining tranche, for reserve support. It will indeed allow wide spread activity, thus allowing leverage availability to impact improvement in valuations of the main board stocks till then quality volume is likely to increase its proportion in overall turnover, according to analyst.

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