Weekly review: Index breaches all-time high, but ends lower

Market participation picked up significantly, KSE-100 Index rose 0.4% during the week

KARACHI: With anticipation building up, the index breached its all-time high closing early in the week and reached the 36,235-point level.

However, the rest of the week saw subdued excitement with the market even closing negative on Thursday. The benchmark index gained 0.4% over the week to close at 36,122 as profit-taking kicked in across most sectors.

The major highlight of the week was successful completion of the eleventh review by the International Monetary Fund (IMF) for the second last tranche of the Extended Fund Facility (EFF). Discussions with the IMF staff mainly pertained to the upcoming budget with an emphasis on fiscal consolidation and GDP growth.

Significant gains were recorded in Fauji Meat Limited with a cumulative volume of 2500 shares, contributing 140 points to the index. On the other hand, Habib Bank Limited  (-3.9%) succumbed to profit taking during the week after gaining a sizable +5.35% in previous week, dragging the index down by 94 points.

The energy sector remained in the limelight during the week. A consortium led by Pakistan GasPort won the contract for the second LNG terminal after submitting the lowest bid of $0.42/mmbtu for a capacity of 600mmcfd.

Additionally, the Cabinet Committee of Privatisation approved divestment of government’s residual shareholding in Kot Adu Power Company Limited (KAPCO) and also approved sale of shares in Mari Petroleum Company Limited (MPCL).

Data on remittances showed that inflows continued to remain strong, increasing by 5% year-on-year in 10MFY16. On the other hand, total liquid foreign exchange reserves remained flat week-on-week, despite $128 million increase in the holdings of State Bank of Pakistan to $16.1 billion, inching closer to the June end target of $17 billion.

On the macro side, the latest trade data indicated that the deficit increased by 17.7% month-on-month due to significant growth in import bills and a slight decline in exports.

While the T-bill auction held this week fetched bids of Rs464 billion against target of Rs200 billion, the government borrowed Rs229 billion, with majority of the funds borrowed in 3M T-bill reflecting expectations of bottoming out of the interest rate cycle.

Average daily volume rose 23% to 294.5 million shares whereas average daily value declined 12% to Rs11.2 billion/$106.9 million.

Foreigners were net sellers of $12.7 million worth of shares in the outgoing week. Net selling worth $3.3 million was seen in cement sector, while net buying of $1.8 million was see in the oil & gas marketing sector.

Winners of the week

Feroze1888



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

Bannu Woollen



Bannu Woollen Mills Limited manufactures and sells woolen yarn, cloth and blankets.

Associated Services Limited



Earlier called Latif Jute Mills Limited, the company is one of the industrial machinery and services firms in Karachi.

Losers of the week

Pakistan Tobacco Company



Pakistan Tobacco Company Limited manufactures and sells cigarettes.

Rafhan Maize



Rafhan Maize Products Company Ltd produces corn oil, industrial starches, liquid glucose, dextrin, gluten meals, and other corn related products. The company also produces a wide range of co-products such as gluten feeds, meals, and hydrol.

Indus Dyeing



Indus Dyeing & Manufacturing Company Ltd manufactures and sells yarn.

Published in The Express Tribune, May 15^th, 2016.

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