Weekly review: Bourse soars 1,254 points over likely inclusion in MSCI EM Index

Banking, oil stocks lead the way as index closes week at 35,974 points

KARACHI:

An eventful week at the bourse saw the index come very close to the 36,000-point level twice as investor interest picked up mainly on the back of talk about Pakistan’s possible reclassification as an emerging market in the MSCI’s upcoming annual review.

Bull-run in the stock market continued for the second consecutive week, which ended on May 6, as investors brushed aside concerns about political developments in the wake of Panama Papers leaks. The market closed the week up 3.6% (1,254 points) week-on-week at 35,974 points.

The week started off on a subdued note with the index ending 0.44% down, however, as news arrived about Pakistan’s potential reclassification into the MSCI Emerging Market (EM) Index, bullish momentum gripped the market and the index gained 623.91 points on Thursday.

Gains were mainly recorded in those blue-chip stocks that were slated to be upgraded to the MSCI EM Index whereas index-heavy oil shares, tracking the uptick in global crude prices, further extended the rally.

Financial stocks - MCB Bank and HBL - were the primary contributors to the index’s rise, adding 265 points cumulatively to the benchmark KSE-100 index followed by Oil and Gas Development Company (OGDC) that contributed 102 points - the highest participation in the last six years.

Additional support for the financial sector came after the announcement of Consumer Price Index (CPI) reading for April. CPI rose 4.17% year-on-year (YoY) and 1.55% month-on-month, indicating that the central bank may not cut its policy rate in the next monetary policy review.

The cement sector also drew interest as sales of the industry rose 9.8% YoY in first 10 months of FY16 to 31.9 million tons. The growth in cement consumption has been led solely by domestic markets where sales grew 17% while exports recorded a drop of 19% to 4.93 million tons.

Among top performers during the week was Pakistan Telecommunication Company Limited (PTCL) that gained on hopes of 3G spectrum auction in the 850 MHz range on June 11. The licence is targeted to generate about Rs42 billion in non?tax revenue and the base price has been set at $395 million. OGDC and Lucky Cement were also among market leaders during the week.

Foreigners remained net buyers and invested $21.20 million with focus primarily on cement ($8.21 million) and bank shares ($5.31 million).

Average daily volumes dropped 1% to 239.9 million shares compared to the previous week. Average daily value rose 8% to Rs12.7 billion.

Winners of the week

Feroze1888 Mills Ltd



Feroze 1888 Mills Ltd manufactures and sells a wide range of cotton towels and fabrics.

International Steels Limited



International Steels Ltd manufactures steel. The company produces cold rolled sheet, and hot dipped galvanized sheet steels. International Steels serves the construction, appliances, automotive, agricultural implements, and packaging industries.

Mari Petroleum



Mari Petroleum specialises in the drilling, production and selling of natural gas.

Losers of the week

Murree Brewery



Murree Brewery Company Limited specialises in the manufacture of beer and Pakistan made foreign liquor. The group also has juice extraction and food manufacturing divisions, located at Rawalpindi and Hattar respectively. Their glass division manufactures all the group’s bottles and jars.

Kohat Cement



Kohat Cement Company Limited manufactures and sells grey cement.

Attock Refinery



Attock Refinery retails petroleum products. The company operates gasoline filling stations in Pakistan and Afghanistan.

Published in The Express Tribune, May 8^th, 2016.

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