Stock Watch.

Summary

During the week two important news had direct impact on the working of Pakistan Stock Exchange (PSX): (i) The approval on Thursday of issuance of sovereign guarantee of Rs20 billion for investment in National Investment Trust (NIT) - State Enterprise Fund - with objective to stabilize stock market; (ii) The controversial removal of PSX CEO Richard Morin by a majority of 8-6 from his post by the board of directors due to his 'unsatisfactory' performance. Only the broker directors voted in favour of his removal while foreign investors seemed satisfied with his conflict of interest explanation.

While the support fund of Rs20 billion is aimed to stabilize the PSX, the absence of CEO will unstabilize the corporate structure of the PSX.

After the statement last Friday by Advisor on Finance Mr. Hafeez Shaikh that government to launch fund to support PSX, the market this week remained under the influence of expected approval of the fund. As such the stock remained volatile throughout the week gaining at times 1,044 points high and went as low as 1010. Over all the KSE-100 Index gained 271 points or 0.8% Wow. The average volume declined to 169m and the market capitalization increased by 35 billion to close at Rs.7.240 trillion.

After last bullish week of index gaining by 7.6 percent, the market on Monday witnessed consolidation and range-bound between 189 to 96. The investors opted for profit-taking and the market close flat with loss of 6,44 points to close at 35,697.37.

The investors lost patience on Tuesday over delay in support fund launch. The market shed 748 points to close at 34,949.28. The news of PSX CEO Richard Morin resignation was received with mixed feeling.

On Wednesday the news about possible approval of support fund kept the market bullish. The KSE-100 Index climbed to 1,044 but settled with increase of 1,010.15 to close at 35,959.43.

On Thursday, market was expecting the ECC to take decision on market support fund in its meeting. Various information flowing in the market about the details of the fund while its approval kept the market volatile going high by 34 points to low of 1010 to finally close at 35.974.79.

Participants/Activity

On average shares of 332 companies were traded. Of these 153 were gainers and 161 were losers and 18 remained...