Weekly review: Market posts recovery, gains 728 points during the week
Positive macroeconomic and sector-specific news provided boost to the market
Positive macroeconomic and sector-specific news provided boost to the market.
KARACHI:
The stock market welcomed the new year with a sharp turnaround as the benchmark KSE-100 index posted a gain of 728 points (2.2%) to close at 33,228 during the week ended January 1.
The index’s gains came on the back of a flurry of positive macroeconomic news coupled with strong performance from the cement and oil and gas sector. While foreign selling continued to put a dent in the market, the overall positivity helped the index close in the green in four of the five trading sessions during the week, ending marginally lower on Thursday.
It has been far from a stellar year for the KSE-100 index as it managed to post a 685-point (2.1%) gain in 2015. The index had posted gains of 42% and 22% in 2013 and 2014, respectively. The KSE-100 was well on track to achieve further heights, rising above 36,000 points in August 2015, but remained in a constant state of flux from thereon primarily due to volatile crude oil prices.
However, it was a positive end to the year as the market opened positively following the long weekend as the government announced that it would defer the long-awaited gas price hike till June 2016. The KSE-100 rose 311 points in the opening two days before ending the week strongly with a 412-point gain on Friday to mark the start of the New Year in style.
The primary driver of growth came in the form of government decisions and macroeconomic data. During the week, the government deferred the gas price hike, reduced the industrial electricity tariff by Rs3 per unit and reduced the price of industrial diesel, all of which was welcomed by the business community.
On the macroeconomic front, inflation figures for the month of December 2015 were recorded at 3.19%, which was below market consensus. The State Bank also revealed that the country’s foreign exchange reserves had crossed $21 billion during the week, providing further positivity at the bourse.
With crude oil prices remaining stable during the international holiday season, the Oil and Gas sector sprang to life after the government announced a 50% increase in the price of gas from the Sui gas field, which is operated by Pakistan Petroleum Limited. As a result, a minor rally was witnessed in the sector.
The cement sector, which had a sluggish couple of months, also performed strongly during the week as strong dispatch figures coupled with steady progress on the China-Pakistan Economic Corridor created interest in the sector. The sector was the primary reason behind the strong performance of the index on Friday.
Despite the positive news flows, foreigners continued to sell at the market, offloading a net of $4.3 million worth of equity during the week, up from $1.8 million in the previous week.
Average daily volumes rose 24.5% and stood at 113.7 million shares traded per day while average daily values remained flat and were recorded at Rs6.6 billion per day. The Karachi Stock Exchange’s market capitalisation stood at Rs7.03 trillion ($66.2 billion) at the end of the week.
Winners of the week
Pakistan Tobacco Company
Pakistan Tobacco Company Limited manufactures and sells cigarettes.
Gul Ahmed Textile Mills Limited
Gul Ahmed Textile Mills Limited manufactures and sells textile products.
Nishat Chunian Limited
Nishat Chunian Limited manufactures and sells yarn and fabric. The company operates spinning, weaving, dyeing, and finishing units.
Losers of the week
Associated Services Limited
Earlier called Latif Jute Mills Limited, the company is one of the industrial machinery and services firms in Karachi.
Shifa International Hospitals Limited
Shifa International Hospitals Limited establishes and runs medical centres and hospitals in Pakistan. The company’s clinical services include medicines, paediatrics, surgical, obstetric and gynaecology, dentistry, rehabilitation services and ophthalmology.
Ibrahim Fibres Limited
Ibrahim Fibres Limited, a part of the Ibrahim Group, operates a polyester staple fiber manufacturing plant. The company manufactures a wide range of polyester staple fiber and it also manufactures a variety of blended as well as pure synthetic yarns. Ibrahim Fibres also owns an in-house power generation plant.
Published in The Express Tribune, January 3rd, 2016.
The stock market welcomed the new year with a sharp turnaround as the benchmark KSE-100 index posted a gain of 728 points (2.2%) to close at 33,228 during the week ended January 1.
The index’s gains came on the back of a flurry of positive macroeconomic news coupled with strong performance from the cement and oil and gas sector. While foreign selling continued to put a dent in the market, the overall positivity helped the index close in the green in four of the five trading sessions during the week, ending marginally lower on Thursday.
It has been far from a stellar year for the KSE-100 index as it managed to post a 685-point (2.1%) gain in 2015. The index had posted gains of 42% and 22% in 2013 and 2014, respectively. The KSE-100 was well on track to achieve further heights, rising above 36,000 points in August 2015, but remained in a constant state of flux from thereon primarily due to volatile crude oil prices.
However, it was a positive end to the year as the market opened positively following the long weekend as the government announced that it would defer the long-awaited gas price hike till June 2016. The KSE-100 rose 311 points in the opening two days before ending the week strongly with a 412-point gain on Friday to mark the start of the New Year in style.
The primary driver of growth came in the form of government decisions and macroeconomic data. During the week, the government deferred the gas price hike, reduced the industrial electricity tariff by Rs3 per unit and reduced the price of industrial diesel, all of which was welcomed by the business community.
On the macroeconomic front, inflation figures for the month of December 2015 were recorded at 3.19%, which was below market consensus. The State Bank also revealed that the country’s foreign exchange reserves had crossed $21 billion during the week, providing further positivity at the bourse.
With crude oil prices remaining stable during the international holiday season, the Oil and Gas sector sprang to life after the government announced a 50% increase in the price of gas from the Sui gas field, which is operated by Pakistan Petroleum Limited. As a result, a minor rally was witnessed in the sector.
The cement sector, which had a sluggish couple of months, also performed strongly during the week as strong dispatch figures coupled with steady progress on the China-Pakistan Economic Corridor created interest in the sector. The sector was the primary reason behind the strong performance of the index on Friday.
Despite the positive news flows, foreigners continued to sell at the market, offloading a net of $4.3 million worth of equity during the week, up from $1.8 million in the previous week.
Average daily volumes rose 24.5% and stood at 113.7 million shares traded per day while average daily values remained flat and were recorded at Rs6.6 billion per day. The Karachi Stock Exchange’s market capitalisation stood at Rs7.03 trillion ($66.2 billion) at the end of the week.
Winners of the week
Pakistan Tobacco Company
Pakistan Tobacco Company Limited manufactures and sells cigarettes.
Gul Ahmed Textile Mills Limited
Gul Ahmed Textile Mills Limited manufactures and sells textile products.
Nishat Chunian Limited
Nishat Chunian Limited manufactures and sells yarn and fabric. The company operates spinning, weaving, dyeing, and finishing units.
Losers of the week
Associated Services Limited
Earlier called Latif Jute Mills Limited, the company is one of the industrial machinery and services firms in Karachi.
Shifa International Hospitals Limited
Shifa International Hospitals Limited establishes and runs medical centres and hospitals in Pakistan. The company’s clinical services include medicines, paediatrics, surgical, obstetric and gynaecology, dentistry, rehabilitation services and ophthalmology.
Ibrahim Fibres Limited
Ibrahim Fibres Limited, a part of the Ibrahim Group, operates a polyester staple fiber manufacturing plant. The company manufactures a wide range of polyester staple fiber and it also manufactures a variety of blended as well as pure synthetic yarns. Ibrahim Fibres also owns an in-house power generation plant.
Published in The Express Tribune, January 3rd, 2016.