Weekly review: Lifeless KSE-100 Index sheds 203 points

Decline in oil prices and auto-policy announcement contributed to the fall

KARACHI:

Lack of positive news flows resulted in lifeless trading as the benchmark KSE-100 index remained range-bound throughout the week, eventually ending 203 points lower (0.6%) at 32,876 on Friday.

A correction in crude oil prices and the announcement of the auto-policy, which was a negative for existing players, were the only major news flows during the week. The outgoing week was the last for future rollovers in March which kept investors on the sidelines.

The week was shortened by the Pakistan Day public holiday on Wednesday. The week started off on a negative note with crude oil prices entering a correctional phase after hitting $42 per barrel at the end of the previous week. The KSE-100 index shed 152 points (0.5%) in the opening two days of the week.

The downward trend continued after the holiday as the oil prices continued to slide downward towards $40 per barrel resulting in the KSE-100 falling another 126 points (0.4%) on Thursday, before a late surge in the cement sector helped the index climb 75 points (0.2%) on Friday to end the week at 32,876 points. The trend of crude oil prices dominating proceedings at the bourse continued this week as oil prices slowly inched lower throughout the week, taking a breather from their recent ascent. With no clarity emerging on a production freeze, oil prices slid towards $40 per barrel towards the end of the week, dragging the equity market with them.

The announcement of the auto-policy for the next five years, although favorable for consumers, was bad news for existing automakers as they will not be eligible for most of the incentives announced for a new entrant. The sector was down as a whole despite posting record growth in recent months and knocked of 34 points from the KSE-100 during the week.

A bright spot was the surge witnessed in the share price of cement companies toward the end of the week with news flows hinting a 20-25% year-on-year growth in dispatch numbers for the month of March. A majority of cement companies ended the week positive, despite witnessing profit-taking earlier in the week.

Foreigners continued to be net sellers at the bourse offloading a net of $2.31 million worth of equity during the week as opposed to net selling of $7.64 million in the previous week. With regional markets still volatile, foreign flows are likely to stay negative in coming weeks.

Average daily volumes dropped sharply by 32.3% and were recorded at 112.9 million shares traded per day, down from 166.8 million shares per day in the previous week. Similarly, average daily values also fell 32.5% to Rs5.30 billion per day. The Pakistan Stock Exchange’s market capitalisation stood at Rs6.80 trillion ($64.96 billion) at the end of the week.

Winners of the week

Punjab Oil



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

Pakgen Power



Pakgen Power Ltd generates and distributes electricity. The
company operates an oil-fired electricity generating plant in Mehmood Kot - Muzaffargarh, Punjab.

Lalpir Power



Lalpir Power Limited was incorporated in Pakistan in 1994. The principal activities of the company are to own, operate and maintain an oil-fired power station having gross capacity of 362MV in Mehmood Kot.

Losers of the week

Pak Suzuki Motor



Pak Suzuki Motor Company Limited manufactures, assembles and markets Suzuki cars, pickups, vans and 4 X 4 vehicles.

Indus Motor



Indus Motor Company Limited was created through a joint venture agreement between the House of Habib, the Toyota Motor Corporation and the Toyota Tsusho Corporation, in order to assemble, manufacture and market Toyota vehicles. The company is also the sole distributor of Toyota vehicles in Pakistan.

Bank AL Habib



Bank AL Habib Limited operates as a commercial bank in Pakistan.

Published in The Express Tribune, March 27^th, 2016.

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