SHARES at the Karachi Stock Exchange saw a week of cautious trade, though the KSE-100 index managed to add 0.33 per cent or 53 points in the first four days of the week with the index closing at 16,251 points. Traders said that almost all through the week, retail investors’ evidenced interest in second and third tier cement and textile stocks. Yet by the fag end most of those small investors decided to take profits and square their positions. The same trend was expected to continue on Friday, being a two session trading day.

As the Pakistani equity market was outperforming regional and international markets, this year to date, foreign investors were encouraged to place more funds with an investment of $5.08 million in the week, taking the aggregate foreign portfolio investment for the month of November to $27.3 million.

Average daily trading volume during the four days stood at 252 million shares, showing a 48 per cent increase over the previous week’s volume of 170 million shares.

The volume was contributed by Tuesday’s seven-month high turnover of 330 million shares, which was led by Islamic banks’ shares after the State Bank of Pakistan abolished all previous circulars regarding minimum rate on Islamic savings deposits.

The minimum savings deposit held by Islamic banks and Islamic branches of the conventional banks which was set at 5 per cent in 2008 and later to 6 per cent in 2012 stands abolished. Analysts said they expected this measure to improve earnings of Islamic Banks as they would eventually be able to reduce their cost of funds.

During the outgoing week, average daily valued traded stood at Rs4.84 billion, up from Rupees four billion of average daily value for the previous week.

Investor interest remained glued to second and third-tier stocks with heavy buying seen in textile stocks that have remained laggards for years.

Analyst Abdul Azeem at Invest Cap said that the improvement of 5 per cent in textile exports, which stood at $4.4 billion in July-Oct period, had enabled textile spinning sector to record profit of Rs1.9 billion in first quarter of financial year 2013, compared to loss of Rs1.4 billion witnessed in the comparable period of the previous year.

Like the last week, the top volume leader was again the Fauji Cement Company with trading of a mammoth 148 million shares. Maple Leaf Cement saw business in 80 million shares after a report that suggested an improvement in its earnings, while the third high volume scrip for the week was Jah.Sidd.Co with turnover of 66 million shares.

Cement stocks attracted investor interest after reports that coal prices were averaging $80 per ton, lower than $85 per ton in the second quarter of last year.

Fertilizer scrips came under active trading after the proposed formula that may give fertilizer producers uninterrupted gas supply in exchange for decrease in local urea prices.

Ministry of Industries and the fertilizer industry was believed to have jointly tailored a new urea price formula, to provide uninterrupted gas supply to urea plants, which would reduce the price of urea by Rs150 per bag.

Big gains were noted in textile and second tier cement stocks during the week, while the front-line heavy-weight stocks were generally quiet.

Future outlook: Analysts at several major brokerage houses said that investors were spooked by the terror incidents on Wednesday in several cities of the country and they were at the edge of their nerves, hoping that the last two days of Moharram, which would fall during the week-end, would pass off peacefully.

“It would propel stocks to a further high as investors realise value in low-priced textile and cement stocks”, said a stock broker.

But some argued that the lack of triggers in the immediate-term could possibly keep activity lackluster until the financial results announcement season starts in winter.