Weekly review: KSE-100 index posts highest weekly gain in a year

Benchmark index advances 2,126 points, or 5.5%, amid Saudi financial support

KARACHI: The outgoing week proved to be an outstanding one for the stock market as it recorded phenomenal gains on the back of clarity on the economic front.

The KSE-100 index surged 2,126 points or 5.5%, marking the highest week-on-week increase for a year, to settle at 40,556 points. A weekly rally of similar extent was last witnessed in October 2017.

Earlier, the trading kicked off on a bearish note as uncertainty regarding the deteriorating macroeconomic situation of the country continued to take its toll on investor sentiments.

Immense selling pressure was witnessed in the following session as concerns mounted as to how the country would deal with the growing challenges. With Pakistan likely to return to the International Monetary Fund for a bailout, market participants were concerned about potential harsh measures that the fund could suggest.

However, a dramatic turnaround was witnessed by mid-week as bulls took charge, pushing the index up by 1,500 points, which was the biggest such increase in the current calendar year so far. The increase came on the back of news that Saudi Arabia had agreed on a support package of $6 billion for Pakistan. The pledge was greeted with enthusiasm as investors resorted to stock buying across the board.

Additionally, with the prime minister due to visit China in the first week of November, there are expectations of further support from the longstanding ally, which further fuelled the rally.

Although the positive run continued for the following three sessions, unimpressive results of some index-heavy stocks reduced the pace of market’s advance. Lower international oil prices and aggressive buying by mutual funds lent support to the index.

On the other hand, global investors remained concerned about higher interest rates, trade wars and weak corporate earnings as the markets declined. However, the rout in global markets could not weaken sentiments at the local bourse.

Amid news of dollar inflows, the rupee strengthened 1% against the greenback during the week. In light of the positive developments, participation in the market shot up with average daily volumes improving 51% to 301 million shares while average daily traded value increased 54% to $75.4 million.

In terms of sectors, positive contribution came from fertiliser (up 470 points) amid better results season, oil and gas exploration companies (up 298 points), banks (up 284 points), oil and gas marketing companies (up 215 points) and cement (up 214 points).

Scrip-wise, major gainers were Engro, Fauji Fertiliser, OGDC, Pakistan Petroleum and MCB Bank that cumulatively contributed 685 points. On the other hand, negative contribution to the index came from Pakistan Tobacco (19 points), Bank AL Habib (17 points) and Habib Metropolitan Bank (9 points).

The outgoing week encompassed a mix of quarterly results out of which Oil and Gas Development Company (OGDC) declared positive surprises while Habib Bank, DG Khan Cement and Hub Power Pakistan were major disappointers.



Foreign investors were sellers of shares worth $17.2 million this week compared to net selling of $19.1 million last week. Selling was concentrated in banks ($8.9 million), exploration and production ($5.7 million) and all other sectors ($5.1 million). On the local front mutual funds led the bullish sentiments, remaining the major buyer worth ($24 million), while individuals and banks were net sellers of $9.9 million cumulatively.



Among major highlights of the week were; current account deficit down 2.5% in Jul-Sept, $6 billion Saudi package was announced to ease Pakistan’s fiscal pain, SBP’s reserves hit the lowest since FY14, power tariff went up by 10-15%, which was lower than the recommendation, and Honda Atlas Cars jacked up car prices.

Winners of the week

Pak Elektron



Pak Electron Limited manufactures and sells a variety of electrical products and domestic appliances. The group’s power products include transformers, energy meters and switchgears. Their appliances consist of a range of deep freezers and air conditioners. The group also has an agreement with Sony Pakistan (Pvt) Ltd, for which Pak Electron will manufacture Sony brand televisions.

Gatron Industries Limited



Gatron Industries Limited manufactures polyester filament and synthetic yarn.

Losers of the week

Ghani Glass



Ghani Glass Limited manufactures and sells glass containers. The company manufactures international glass containers for pharma, food and beverage. Ghani Glass also manufactures float glass variations for commercial, domestic and industrial use.

EFU General Insurance



EFU General Insurance Limited is an insurance provider. The group supplies a number of lines of coverage, including fire, marine, aviation, transport, motor and miscellaneous.

Published in The Express Tribune, October 28^th, 2018.

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