KARACHI: A thorough beating followed by a moderate recovery at the bourse saw the index finish with a 1,097-point or 2.6% fall week-on-week, helping it to settle at 41,312.59 points.
The unfolding political drama, fuelled by the tension between the civil and military establishment, maintained pressure on the stock market as investors chose to remain on the sidelines.
The week commenced on a negative note, as volumes remained low making Monday “one of the slowest days in over 30 months”, according to a brokerage house report. The losing streak continued for the following two sessions, as the index dropped to an 11-month low of 40,461 points.
This trend was reversed on Thursday; as value buying helped overcome the selling pressure bringing a brief respite for the index, even though volumes remained thin. The positive run continued on Friday, with share prices soaring over 844 points and the index once again crossing the 41,000 barrier.
The KSE-100 Index lost 1,948 points (4.6%) during the first three days of the week; however, the gush of positive sectors-related news flow helped the index gain 844 points (2.1%) on Friday. Investors kept aside political uncertainty to take advantage of attractive valuations, injecting money across the board in cement, auto and banking stocks.
This means, that had it not been for the Friday rally, the weekly performance could have been worse.
Politics was not the only factor responsible for the bearish performance. Other concerns that captured investor interest were decline in cement prices in some parts of north-region during early week, fertiliser off-take (urea sales down 81% MoM), and OMC sales (down 14% MoM).
The choppy sessions kept investor interest minimal, and participation was mostly skewed towards index-heavy blue-chips. Average volumes were down 4% during the week to 140 million shares while value traded surged 20% to $71 million.
Sectors that kept the index under stress were banks (225 points), cements, (207 points), fertilisers (152 points), oil and gas marketing companies (132 points), pharmaceuticals (63 points), engineering (63 points) and refinery (51 points).
Cement sector remained in the limelight as it fell 5% owing to pricing concerns pulling down the stock prices in the earlier part of the week; however, they partially recovered on Friday in anticipation of pricing resolution expected next week.
In terms of scrips, major laggards remained HBL (down 105 points), LUCK (94 points), SNGP (92 points), ENGRO (60 points), SEARL (43 points), and DAWH (37 points).
Foreign investors sold stocks worth $9.76 million during the week compared to a net buy of $0.52 million seen in the prior week. On the local front, banks/DFIs remained major buyers of $14.38 million while selling was majorly triggered by insurance companies ($15.44 million).
Selling was centred in cement ($5.5 million), E&P ($3.6 million), banks ($3.4 million) & power ($1.3 million); while there was some buying in fertilisers ($1.5 million) & technology ($0.8 million).
On the economic front, foreign exchange reserve continued to slide downwards, reporting a weekly decline of $228 million, where more importantly reserves held by the State Bank of Pakistan (SBP) dropped to a 25-month low of $13.86 billion.
CPI inflation for Sept-2017 was also released on Monday, with headline inflation clocking in expectedly at 3.9% YoY.
Other key highlights of the week were; cotton production registered 50% YoY growth, Shanghai Electric wrote to Nepra highlighting the new multi-year tariff for K-Electric as a major impediment in its endeavours to purchase the utility, Pioneer Cement (PIOC) looked to acquire Galadari Cement and the government issued office memorandum for export of sugar with a subsidy of Rs10.7/kg.
Winners of the week
Nishat Chunian Limited manufactures and sells yarn and fabric. The company operates spinning, weaving, dyeing, and finishing units.
Pakistan Services Limited is the holding company for Pearl Continental Hotels (Private) Limited, which constructs, operates and manages hotels. The group also owns a number of smaller companies that provide rent-a-car, travel arrangements and tour packages.
Service Industries Limited specialises in manufacturing tires and tubes for motorcycles, bicycles, rickshaws and trollies. The company also produces footwear.
Losers of the week
Crescent Steel & Allied Products Limited manufactures steel lined pipes and multi-layer pipe coatings, which are used for water, oil and gas transmission. The company also has a cotton division that manufactures cotton yarn.
Attock Refinery Limited, a subsidiary of the Attock Oil Company, specialises in the refining of crude oil.
Sui Northern Gas
Sui Northern Gas Pipelines Limited purchases, purifies, transmits, distributes, and supplies natural gas, in addition to marketing Liquefied Petroleum Gas.
Published in The Express Tribune, October 8th, 2017.