Foreign investors are still not taking active part but at least their net buying was higher than the last week, this week mutual funds were excited in their fresh buying to save CGT on their holdings, but on Thursday massive selling witnessed from mutual funds too. Local traders were threatened by the implications of CGT, they still don’t know the procedures of deduction, they are also afraid of filing their taxes, and daily traders are concern of advance deduction on their trades.
Last but not the least the KSE boat still not completely rescued, the positive numbers of last session was not enough to attract the investors.
The ongoing rifts between the political forces about budget and the SC proceedings, and the recommendation to raise corporate tax rate will add more pressure to the feared investors
Along with so many negative threats, we do have some positive developments, first time remittances exceeded the mark of $ 8 billion in any fiscal year while the remittances for the month of June are yet to be accounted for, and the increase of our auto sales and the existing potential in major automobile manufacturer are signaling some growth on economic front.
Future Outlook:
After a sharp decline on Thursday a quick rebound witnessed in KSE, the recovery was expected as per our earlier call, but adding this many point was not expected, low volumes still indicating the existing threats to the index, Friday closing giving a weaker possibility for continuation in recovery, followed by the Monday closing.
Charts are not convinced of any bullish expectation right now, they are still indicating existing pressures, though the positive closing pushed the ultimate decision on trend to the next session.
Now 9,504 become very critical for the market, if market trade and sustain above the said level, may give some opportunity for new comers, but let me tell you the comfy zone for bulls is quite far from here. On the other hand trading below 9,443 may take market to its exit level which is around 9,370.
The volatile movement of the market will remain until the budget get approved from assembly, it is recommended to check on analysts views on weekend about the implication of new taxes and how the economy will take the new budget.
My sincere advice for investors to please focus on future vision rather focusing on short term possibilities, the current index movement can only benefit the intraday traders.
That’s why we recommend TRADING ON LEVELS
Key Levels
9,806
9,761 – 9,744
9,690
9,632 – 9,614
9,568 – 9,544
9,504
9,443
9,377 – 9,359
9,270
9,189
Source: NCCPL
Foreign Investors Activities
7th to 11th June, 2010
Net Buy USD $ 1,351,768
Disclaimer: This commentary, news or key levels are not a recommendation to buy or sell, but rather a guideline to interpret the specified indicators. This information should only be used by investors who are aware of the risk inherent in securities trading. We accept no liability whatsoever for any loss arising from any use of these levels. However the author DOES NOT GUARANTEES the accuracy of information provided on this report and is NOT RESPONSIBLE FOR ANY ERRORS AND/OR OMISSIONS.
