5,662
March 9, 2009
The Karachi Stock market closed in the red today. 2moro is a holiday and therefore a possible wait & see approach is being taken for the lawyers " long fart " on the 12th, whether there will be violence, more economic disruption etc etc.
News : Pakistan’s equity market was once famous for its depth that is liquidity. Due to sufficient volumes, the Pakistan market up till last year was able to sustain large orders without impacting the market price. But that is not the case now. Due to unwarranted three-and-a-half month closure of market coupled with the absence of low cost investor friendly leveraged products, the market activity has declined substantially. Few years back Pakistan was one of the most actively traded stock market in Asia with turnover velocity (turnover divided by market capitalization) of 380% in 2005. That is investors used to trade four times the value of market in a year. In other words, they were trading 20 times the shares available in the market (free float).
These higher volumes in the past at the one hand provide the much needed liquidity and depth to the market but on the other hand this excessive volume signalled that the market was over speculative thanks to easy availability of funds through badla and deliverable single stock futures. But that was something that attracted investors’ attention as the market was providing opportunity to enter and exit without any major impact on share prices.Right now turnover velocity is only 60%. With average daily volume of approx Rs4 bn (US $50mn) a day in first two months of calendar year 2009, the investors are turning less than the size of the market in a year which has shrunk from US $75 billion last year to only US $22 bn now… Aaj News
Market Low : 5,662.01 High : 5,748.10
Market Close : 5,662.01 – 86.09 points down
