Brexit blues fade away as KSE-100 Index gains 3.5% week-on-week
During the week ended Friday, the Pakistan Stock Exchange’s (PSX) benchmark-100 index gained 3.5% as foreign buying and local interest resulted in positive sentiments across index-heavy sectors.
The index registered a new all-time-high during the week before profit-taking on Friday resulted in a minor dip with 39,188.47 points being the closing level.
Fears over Brexit and a global economic slowdown subsided with local mutual funds as well as foreigners’ buying provided support to the market.
Equities soared high on the opening day of the week with the benchmark KSE 100-share Index settling comfortably above 38,000 points and near the day’s high. This trend continued with the breaching its record each day. The only damp note came on Friday when the index settled 68.53 points down after a minor fall in the final hours of the trading session.
A number of developments helped propel the market; drop in cut-off yields in recently held Pakistan Investment Boards auction was one such action that raised expectations of a further policy rate cut.
Additionally, overall jubilance in the global equity markets after fading Brexit concerns was another positive sign, while the imposition of new taxes on real estate sector also helped market regain some momentum on the back of expectations of increased inflows.
Key sectors of the week consumers, pharmaceuticals and cements outperformed the benchmark KSE-100 index amidst positive news flows whereas banks, fertilisers and foods underperformed.
Oil and gas marketing and exploration companies came in the limelight driven by impressive oil products sales numbers as sales grew by 5% to 23.37 million tons in FY16 and well discoveries. Auto sales also increased by 20% year-on-year in FY16 led by a sharp increase of 28% in sales for Pak Suzuki Motor and continued strength in Toyota sales. The loss in the value of yen also provided some much-needed support to the auto sector that suffered over Brexit fears.
Foreign Institutional Portfolio Investment (FIPI) witnessed an inflow of $21.4 million during the week vs $1.19 million outflow last week.
Overall buzz resulted in increased participation as well, evident from jump in volumes and value that increased to 194 million shares per day (+35%) and $136 million (+73%), respectively.
Winners of the week
Hascol Petroleum Limited
Hascol Petroleum Limited is engaged in the purchase, storage and sale of petroleum products such as fuel oil, high speed diesel, gasoline, Jet A-1, LPG and lubricants.
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.
Bannu Woollen
Bannu Woollen Mills Limited manufactures and sells woollen yarn, cloth and blankets.
Losers of the week
Feroze 1888
Feroze 1888 Mills Ltd. manufactures and sells a wide range of cotton towels and fabrics.
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.
Published in The Express Tribune, July 17th, 2016.
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