The market witnessed a mixed week as the benchmark KSE-100 index consolidated above the 16,000-point barrier, shedding 46 points (0.3%), to close at 16,197 points during the week.
The week kicked off on a negative note as violence in Karachi took its toll on investor sentiments and resulted in the index closing in the red during the first three sessions of the week. The situation was exacerbated, after a coalition partner of the government called for a “state of emergency” to be declared in the metropolis.
However, positive news on the macro front resulted in the market clawing back on it losses in the final two sessions, and the local bourse managed to close the week with a mild decline of 0.3%. The index managed to hover safely above 16,000 points throughout the week.
A thing of concern to many investors was the fact that foreigners pulled out $0.6 million after 20 consecutive weeks of being buyers. Furthermore, the country’s foreign exchange reserves continued their declining trend and fell $225 million to $13.85 billion during the period.
However, there was a silver lining for the market towards the end of the week, as macroeconomic news provided the boost to investor sentiments. Remittances for the month October 2012 stood at a record $1.37 billion, beating the previous best of $1.31 billion in August 2011, up 34% percent.
Moreover, the European Union’s trade concession package went into effect from November 15, 2012, providing duty-free market access for 75 items to be exported from Pakistan. Textile companies received a boost from this implementation as Nishat Mills and Nishat Chunian outperformed the market by 1.2% and 4.7% respectively.
In sector-specific news, the cement sector had a topsy-turvy week as varying news circulated regarding a reduction and then an upward revision in cement prices. Smaller sized cement manufacturers were volume leaders throughout the week, with Maple Leaf Cement outperforming the market by more than 18%.
The fertiliser sector suffered another blow as Dawood Hercules Fertilizers, connected to the Sui Northern Gas Pipelines (SNGPL) network, announced gas outages at its plant, due to earlier-than-expected winter load-shedding. Resultantly, the stock price of Dawood Hercules and Engro Corporation (also on the SNGPL network) tumbled by 6.4% and 5.4% respectively.
Average daily volumes picked up by 16.7% standing at 170 million shares traded per day during the week. However, average daily value of shares traded declined by 27.5% to Rs4.07 billion, as most of the activity took place in second and third -tier stocks. Market capitalisation declined 0.1% to Rs4.04 trillion week-on-week.
Winners of the week
Pakistan International Container Terminal (PICT) operates as a terminal operating company in Karachi. It engages in the construction, development, operation, and management of a common user container terminal at Karachi Port.
Kohinoor Energy Limited owns, operates and maintains a 124-megawatt power station in Lahore. The Water and Power Development Authority is the sole customer of the company, which was incorporated in 1994.
Azgard Nine Limited manufactures yarn and denim garments with a strong customer base in US, Canada and Europe. The company operates through its subsidiaries including Pak-American Fertilisers Limited, Hazara Phosphate Fertilisers and Montebello SRL.
Losers of the week
Attock Cement Pakistan Limited engages in the manufacture and sale of cement in Pakistan. The company offers Portland cement, sulphate resistant cement, and Portland blast furnace slag cement under the ‘Falcon Cement’ brand name.
TPL Trakker Limited is a vehicle tracking and fleet management service provider for markets in the Middle East and South Asian region. The company’s business is to supply GPS, GSM and satellite mobile asset tracking, management and information solutions.
The principal activity of the company is production, purchase and sale of fertiliser. The company has an annual production capacity of 345,000 tons and markets its urea under the Bubber Sher brand.
Published in The Express Tribune, November 18th, 2012.