Weekly review: Rally continues for fourth straight week
KSE’s benchmark 100-share index gains 92 points.
KARACHI:
The stock market’s rally continued for the fourth straight week led by fertiliser and cement stocks this time.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 92 points or 0.8% on a weekly basis to 11,853 points. Investor interest rose as Engro increased fertiliser prices while cement manufactures increased prices of their product.
Some respite was also seen on the political front as tensions between Pakistan and the US subsided slightly while political coalition partners Muttahida Qaumi Movement and Pakistan Muslim League-Quaid also rejoined the government.
However, average traded value and volumes during the week fell 12% to $46 million and down 9% to 75 million shares, respectively.
Foreign investors kept selling although on a lower pace as an outflow of $2.7 million was observed during the week against an outflow of $7.3 million in the previous week.
Inflation dropping to 10.46% in September provided the early impetus the market needed during the start of the week followed by fertiliser and then cement prices.
The power crisis remained in the limelight throughout the week as street protests were carried out, mostly in northern part of the country.
To tackle the situation, energy conservation plan was proposed to the prime minister for reducing power consumption through two weekly holidays and other measures.
Moreover, the government reportedly decided to convert outstanding financing and accrued interest of public sector power companies and commodity financing into Pakistan Investment Bonds.
Banks will benefit the most, however, companies in the energy chain will gain through additional credit availability as well.
Fertiliser manufacturers raised ex-factory urea prices by Rs174 per bag owing to gas suspension by Sui Northern Gas Pipelines to producers due to reduced supply from Qadirpur. Bearing a positive impact on earnings, Fauji Fertilizer Company and Fauji Fertilizer Bin Qasim’ stocks gained 5.3% and 2.9%, respectively, during the week.
Moreover, cement manufacturers in the southern region have also increased prices by Rs15 to Rs400 per 50kg bag.
The market is expected to start the upcoming week on a positive note as State Bank of Pakistan cut interest rate by 1.5 percentage points to 12% on Saturday, much higher than market expectation. Other than this, investors will keep an eye on local political front.
Monday, October 3
The Karachi bourse remained under pressure amid thin business as global markets fell because of worsening European debt crisis. MSCI world equity index dropped 1.4% to hover above 14-month low set in September.
Tuesday, October 4
Stock market surged to an eight-week high as investors tried to grab every fertiliser stock available in the market.
Fertiliser stocks were highly sought following domestic producer Engro increasing urea prices to overcome production losses due to gas outage at its new urea plant.
Wednesday, October 5
The stock market’s rally ended as investors opted to book profits with stock prices standing at inflated levels. Steam fizzled out of the over-heated run-up that was initiated by the fertiliser sector on Tuesday.
Thursday, October 6
The stock market closed on a negative note amid low turnover as political noise in the country pushed participants to book profits. Cement stocks remained positive after manufacturers increased prices by Rs15 per bag to protect their profit margins.
Friday, October 7
The stock market ended the last trading session of the week range-bound as investors geared up for the monetary policy announcement on Saturday. The State Bank of Pakistan is likely to cut its policy rate in the monetary policy review because of lower inflation, according to analysts polled by Reuters.
Published in The Express Tribune, October 9th, 2011.
The stock market’s rally continued for the fourth straight week led by fertiliser and cement stocks this time.
The Karachi Stock Exchange’s (KSE) benchmark 100-share index gained 92 points or 0.8% on a weekly basis to 11,853 points. Investor interest rose as Engro increased fertiliser prices while cement manufactures increased prices of their product.
Some respite was also seen on the political front as tensions between Pakistan and the US subsided slightly while political coalition partners Muttahida Qaumi Movement and Pakistan Muslim League-Quaid also rejoined the government.
However, average traded value and volumes during the week fell 12% to $46 million and down 9% to 75 million shares, respectively.
Foreign investors kept selling although on a lower pace as an outflow of $2.7 million was observed during the week against an outflow of $7.3 million in the previous week.
Inflation dropping to 10.46% in September provided the early impetus the market needed during the start of the week followed by fertiliser and then cement prices.
The power crisis remained in the limelight throughout the week as street protests were carried out, mostly in northern part of the country.
To tackle the situation, energy conservation plan was proposed to the prime minister for reducing power consumption through two weekly holidays and other measures.
Moreover, the government reportedly decided to convert outstanding financing and accrued interest of public sector power companies and commodity financing into Pakistan Investment Bonds.
Banks will benefit the most, however, companies in the energy chain will gain through additional credit availability as well.
Fertiliser manufacturers raised ex-factory urea prices by Rs174 per bag owing to gas suspension by Sui Northern Gas Pipelines to producers due to reduced supply from Qadirpur. Bearing a positive impact on earnings, Fauji Fertilizer Company and Fauji Fertilizer Bin Qasim’ stocks gained 5.3% and 2.9%, respectively, during the week.
Moreover, cement manufacturers in the southern region have also increased prices by Rs15 to Rs400 per 50kg bag.
The market is expected to start the upcoming week on a positive note as State Bank of Pakistan cut interest rate by 1.5 percentage points to 12% on Saturday, much higher than market expectation. Other than this, investors will keep an eye on local political front.
Monday, October 3
The Karachi bourse remained under pressure amid thin business as global markets fell because of worsening European debt crisis. MSCI world equity index dropped 1.4% to hover above 14-month low set in September.
Tuesday, October 4
Stock market surged to an eight-week high as investors tried to grab every fertiliser stock available in the market.
Fertiliser stocks were highly sought following domestic producer Engro increasing urea prices to overcome production losses due to gas outage at its new urea plant.
Wednesday, October 5
The stock market’s rally ended as investors opted to book profits with stock prices standing at inflated levels. Steam fizzled out of the over-heated run-up that was initiated by the fertiliser sector on Tuesday.
Thursday, October 6
The stock market closed on a negative note amid low turnover as political noise in the country pushed participants to book profits. Cement stocks remained positive after manufacturers increased prices by Rs15 per bag to protect their profit margins.
Friday, October 7
The stock market ended the last trading session of the week range-bound as investors geared up for the monetary policy announcement on Saturday. The State Bank of Pakistan is likely to cut its policy rate in the monetary policy review because of lower inflation, according to analysts polled by Reuters.
Published in The Express Tribune, October 9th, 2011.