Weekly review: Market’s upward drive continues as KSE-100 gains 1,147 points

Stable oil prices, news of Engro Foods’ divestment and impressive cement sales drove growth

KARACHI:

The stock market sustained the momentum it built up leading up to the current week as stable oil prices and sector-specific developments helped the KSE-100 index gain an impressive 1,147 point (3.7%) during the week ended March 4.

The gains came on the back of strong showing in the latter half of the previous week and the index managed to continue its upward drive with oil prices stabilising above the $35 mark, news of the divestment of Engro Foods and a jump in cement sales all helped the KSE-100 close positive in all five days of the week.

The week started off slowly as the index remained volatile due to fluctuating oil prices and pressure on the banking sector. But things turned around quickly with the start of the new month as oil rebounded and the announcement of inflation numbers which clocked in above 4%, providing support to the banking sector.

The market truly came to life on Wednesday with expectations of strong cement sales figures fueling growth and the announcement of Engro Corporation’s sale of Engro Foods to a Dutch company on Thursday had a major impact in the market. The KSE-100 rose 1,147 points during the week to close at 32,441 on Friday.

Oil prices continued to have a major impact on the market as crude oil prices stabilised above the $35 per barrel mark. With volatility subsiding and crude prices inching as high as $37 per barrel by the end of the week, the sector received a major boost with the sector contributing 197 points to the KSE-100’s gains.

The cement sector, which had come under pressure in recent weeks due to fears of a price war, bounced back sharply after sales figures for February came to light, posting a 17% year-on-year gain. The sector rose 6.4% during the week and contributed 216 points to the index.

The biggest news of the week came from the fertiliser sector where Engro Corporation, which is still classified in the sector, announced that it was divesting from Engro Foods and selling it to a Dutch Company in a deal worth over $460 million. The sector received a major boost from the news and contributed 348 points to the KSE-100 index.

Foreign investors continued to sell with a net outflow of $1.56 million worth of equity during the week, down from the $4.82 million in the previous week. The outflows are on a downward trend and with foreign interest picking up, the direction of flows may soon turn positive in the coming months.

Average daily volumes fell slightly by 2.3% and were recorded at to 135 million shares traded per day. On the other hand, average daily values picked up sharply by 31.2% and were recorded at Rs8.17 billion per day. The Pakistan Stock Exchange’s market capitalisation stood at Rs6.80 trillion ($64.9 billion) at the end of the week.

Winners of the week

Engro Foods



Engro Foods Ltd produces a wide range of dairy products. The company’s products include ice cream, flavoured milk, fruit juices and milk powders.

Engro Corporation



Engro Corporation Ltd manufactures and markets fertilisers and plastics, generates electricity, and processes food. The company produces nitrogenous, phosphatic and blended fertilisers, polyvinyl chloride resin, and industrial automation products, develops electricity generating plants, produces dairy foods, and operates a liquefied petroleum gas and liquid chemical terminal.

Dawood Hercules



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

Losers of the week

Punjab Oil



Punjab Oil Mills Ltd manufactures and sells vegetable ghee, cooking oil and laundry soap.

Hum Network



Hum Network Ltd operates satellite television channels. The company operates a channel targeted primarily at women, one about food, and one that covers lifestyle and entertainment.

Lalpir Power



Lalpir Power owns, operates and maintains an oil-fired power station having gross capacity of 362MW in Mehmood Kot, Muzaffargarh, Punjab Pakistan.

Published in The Express Tribune, March 6^th, 2016.

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