KARACHI: In sharp contrast to the previous week, the KSE-100 saw a bearish trend as profit-taking and correction dragged the index to finish 566 points or 1.21% lower at 46,072.
Despite the announcement of a tax amnesty scheme last week, the euphoria did not continue, as political opposition rejected the scheme. Additionally, uncertainty over the upcoming federal budget and hearings of key political personalities in the Supreme Court also hurt investors’ sentiments.
However, the market was provided with some relief on account of market talk regarding the proposal for reduction and settlement of GIDC, which buoyed positive sentiment in the fertiliser sector.
The market took a breather from the eight-day rally as it finished lower on Monday on account of profit-taking. The negative streak continued for the next session, as worries over the increasing trade deficit also aggravated matters. However, things took a turn as interest in oil shares, due to increasing international crude prices, helped the market recover.
Unfortunately, the Asian Development Bank’s review on Pakistan’s economy added to investors’ concerns leading the market to decline once again. This trend continued on the last trading day of the week as the Supreme Court announced a ‘lifetime ban on holding of public office’ for former prime minister Nawaz Sharif and PTI leader Jahangir Tareen.
Activity remained dull as trading volumes decreased 5% to 247 million shares, while value declined 30% to $80 million in the outgoing week, indicating increased interest in small caps over the week.
Sectors such as autos (up 1.7% week-on-week), insurance (up 1.4%), fertilisers (up 0.8%), and oil & gas exploration (up 0.1%) remained the major outperformers during the week.
Other heavyweights such as banks (down 2.7% week-on-week), cements (down 3.5%), pharmaceuticals (down 2.6%) and chemicals (down 4.0%) underperformed the index, ultimately dragging overall index down to end in the red zone.
Banks witnessed heavy selling pressure over concerns on the implementation of amnesty and its effectiveness in materialisation of foreign inflows.
In terms of scrips, positive contribution came from PPL (+60 points), FFC (+49 points) and DAWH (+29pts). Scrips that contributed negatively include HBL (-150 points), LUCK (-84 points), UBL (-68 points), BAHL (-59 points) and MCB (-47 points).
Interestingly, however, foreign investors continued to build position and remained net buyers during the week amounting to $17.5 million versus net buying of $3.6 million last week. On the other hand, amongst local investors individuals remained net buyers of $11.9 million whereas banks were net sellers of $9 million.
Among major highlights of the week were; Pakistan’s external debt grows at fastest pace in four years, Neelum-Jhelum started providing power to the grid, remittances grew to $14.6 billion in nine months and exports increased by 24% year-on-year in March 2018, highest in four years.
Winners of the week
Jahangir Siddiqui & Company
Jahangir Siddiqui & Company Limited is an investment company, offering share brokerage, money market, advisory and consultancy, underwriting and portfolio management services.
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.
Honda Atlas Cars
Honda Atlas Cars Pakistan Limited manufactures, assembles and sells Honda vehicles through its many divisions within Pakistan.
Losers of the week
Colgate Palmolive (Pak)
Colgate-Palmolive Pakistan Limited manufactures and sells detergents, personal hygiene and a variety of other products.
Bata Pakistan XD
Bata Pakistan Limited manufactures and sells rubber, leather and microlon sandals and shoes.
Ibrahim Fibres Limited, a part of the Ibrahim Group, operates a polyester staple fibre manufacturing plant. The company manufactures a wide range of polyester staple fibre and it also manufactures a variety of blended as well as pure synthetic yarns. Ibrahim Fibres Ltd also owns an in-house power generation plant.
Published in The Express Tribune, April 15th, 2018.