The government’s acceptance of the court’s decision that disqualified former prime minister Nawaz Sharif and a smooth appointment of new Prime Minister Shahid Khaqan Abbasi pacified the investors.
Hence, the previous week’s positive ride continued and Monday recorded an intra-day surge of 1,200 points. Though profit-taking wiped off the day’s gains, the KSE-100 Index closed in the green zone.
The index continued to rise for the following three sessions and eventually crossed 47,000 points after a brief hiatus on Thursday.
However, Friday saw the index dip as profit-taking pushed it in the red zone.
The rise in the index was supported by locals, mutual funds and companies that had kept a distance in the previous few weeks waiting for the political dust to settle down before re-entering the bourse.
Overall activity largely improved as average daily trading volumes jumped 76% week-on-week to 349 million shares from 198 million in the previous week while average daily trading value rose 62% to $157 million.
Activity was focused on retail-favourite stocks, which included Azgard Nine (134 million shares), The Bank of Punjab (120 million), K-Electric (113 million), TRG (99 million) and Aisha Steel Mills (95 million).
The sectors that contributed to the index’s advance were oil and gas marketing companies (219 points), cement plants (133 points) with 40% year-on-year increase in off-take in June 2017, fertiliser plants (122 points) amid advent of the result season and better demand, oil and gas exploration companies (116 points) and power generation and distribution companies (95 points).
On an individual basis, Engro Corporation, Pakistan State Oil, Sui Northern Gas Pipelines, Oil and Gas Development Company and Hub Power Company added 110 points, 97 points, 86 points, 60 points and 47 points respectively to the index during the outgoing week.
Meanwhile, local mutual funds showed the largest buying interest with net buying of $34 million compared to $28 million in net selling in the previous week.
On the other hand, foreign investors continued to offload their positions with another large offloading of $41 million compared to net selling of $13 million in the previous week.
Major buying was seen in the fertiliser sector ($1.1 million) whereas major selling was recorded in cement stocks ($13.2 million), exploration and production companies ($6.1 million) and banks ($4.9 million).
Among major highlights of the week were rupee’s decline to a three-week low of Rs109 to a dollar in the open market after Sharif’s ouster, rise in public debt to Rs20.8 trillion in May, Moody’s statement that Sharif’s disqualification had increased policy uncertainty, CPI inflation numbers for July 2017 at 2.91% YoY, solution found by the government and fertiliser producers to the subsidy crisis, likely tax refund of over Rs15 billion to the textile sector by August 14, increase in cement prices by Rs10-15 per bag and announcement of production resumption by Byco refinery.
Winners of the week
Crescent Jute
Crescent Jute Products Ltd manufactures and markets jute and cotton textiles.
Cherat Packaging
Cherat Packaging Limited manufactures and markets paper bags for the construction industry. The company manufactures various types of paper bags using clupak sack kraft paper imported from Austria, Sweden and the Czech Republic.
TRG Pakistan
TRG Pakistan operates as an information technology company. The company provides business support and software services to companies. TRG Pakistan manages call centres and offices located in Pakistan and elsewhere throughout the world.
Losers of the week
Philip Morris (Pak)
Philip Morris Pakistan Limited manufactures and sells tobacco and cigarettes.
Feroze 1888
Feroze 1888 Mills Ltd manufactures and sells a wide range of cotton towels and fabrics.
Pak Tobacco
Pakistan Tobacco Company Limited manufactures and
sells cigarettes.
Published in The Express Tribune, August 6th, 2017.
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