Weekly review: KSE-100 gains 883 points as oil stocks rally

Banking sector also performed strongly after HBL’s successful SPO.

KARACHI:

The stock market continued its upward drive as rising crude oil prices prompted a rally in the heavyweight oil and gas sector and pushed the benchmark KSE-100 index up by 883 points (2.7%) during the week ended April 17.

The mood at the bourse was festive as a flurry of positive newsflow aided the KSE-100’s ascent. Strong activity was also witnessed in the banking sector following the government’s successful divestment in Habib Bank Limited (HBL).

The week started off on a quiet note as foreign and institutional selling in the opening couple of days kept investors nervy. However, towards the end of the week, increasing crude oil prices, activity in the banking sector and an interview by the finance minister kicked off a buying spree which resulted in the index climbing 1,125 points in the final three days to close at 33,234 on Friday.

The oil and gas sector was the star performer as global crude oil prices hit their 2015 peak during the week. Pakistan Petroleum Limited (PPL) led the gains with its share price climbing 9.3%, while Pakistan Oilfields Limited (POL) and the Oil and Gas Development Company (OGDC) followed close behind with a 7.5% and 5.7% gain, respectively.

Similarly, the banking sector also witnessed strong activity after the government successfully liquidated its holding in HBL after receiving bids of $1.6 billion compared to its offer of $1.02 billion. The divestment was called a credit positive by Moody’s and sparked activity in the entire sector.

MCB Bank and UBL contributed 70 and 68 points, respectively to the index’s gains while the sector as a whole added 232 points to the KSE-100’s gains.

During the week, the country’s Finance Minister Ishaq Dar was quoted in an interview saying that the State Bank is likely to further reduce the discount rate in its Monetary Policy announcement in May. The news was welcomed by the bourse and resulted in buying activity in high-yielding stocks.

Another highlight of the week was the finalisation of the Chinese president’s visit to Pakistan on April 20 in which he is set to announce $46 billion worth of investment in the country, focusing on infrastructure development.

Despite being sellers at the start, foreigners ended as net buyers as heavy buying was witnessed towards the end of the week. Foreigners purchased a net of $7.5 million during the week and the inflow provided another reason to cheer to local investors.

Average trading volumes shot up 23% and were recorded at 296 million shares traded per day. However, the increase in activity was strongly biased towards second- and third-tier stocks and reflected in average daily values climbing only 3.5% to Rs14.26 billion. The Karachi Stock Exchange’s market capitalization rose from Rs120 billlion to Rs7.24 trillion ($71.33 billion) at the end of the week.

Winners of the week

JDW Sugar



JDW Sugar Mills, Limited produces and sells crystalline sugar. The company is located in District Rahim Yar Khan and was formerly named United Sugar Mills Limited.

Dawood Hercules



Dawood Hercules Corporation Limited produces urea fertilisers. The company also produces anhydrous ammonia for manufacturers of soda ash, fructose, and other chemicals.

TRG Pakistan



TRG Pakistan operates as an information technology company. The company provides business support and software services to companies. TRG Pakistan manages call centres and offices located in Pakistan and elsewhere throughout the world.

Losers of the week

PTCL



Pakistan Telecommunication Company Limited provides fixed line domestic and international telephone services, telex, telegraph, fax and leased circuit services in Pakistan. The company owns all public exchanges, the nationwide network of local telephone lines, principal long distance transmission facilities and international telephone gateways in Pakistan.

Nestle Pakistan Limited



Nestle Pakistan Limited manufactures, imports and sells dairy products, confectioneries, culinary products and fruit juices. The group’s products include milk, butter, cream, noodles, coffees, and dietary and infant products.

Attock Cement



Attock Cement Pakistan Limited manufactures and sells cement and related products. The company is also part of the Pharaon group, which in addition to investments in the cement industry also owns interests in the oil and gas sector.

Published in The Express Tribune, April 19^th, 2015.

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