Weekly Review: Bulls breach four-year high
Investor sentiment remains buoyant on euphoria over ICH.
KARACHI:
Investor sentiments at the stock market remained buoyant with the bourse gaining 352 points or 2.3% during the week to close at the 15,391.58-point level as the bourse surged to a four-year high.
The bulls continued to push the stock market to new highs as euphoria related to the international telecom gateway promoted heavy buying in the telecom sector which kept the turnover ticking with support from index heavyweight oil and gas sector, said a KASB direct research note.
Though Wednesday’s session dampened investor sentiments, the bourse reached its climax on the last trading session of the week, climbing 132 points as Friday’s closing marks a re-run of levels last encountered in April, 2008.
Average daily volumes stood at 20.1 million shares traded per day, up 83.7%% over the previous week. As most of the increased activity was witnessed in the top-tier stocks; average daily volume rose only 94.2% to Rs1.4 billion worth of shares traded per day.
Pakistan Telecommunication Company Limited (PTCL) – stayed in the spotlight for the whole week –as investors disregarded the Competition Commission of Pakistan’s reservations on the formation of international clearing house (ICH) plan calling it anti-competitive. The largest and most liquid stock in the sector, PTCL, gained 18% week-on week and stood as the third highest gainer among the top 100 stocks, said the note.
The proposed ICH gateway will converge all international calls to a single technical gateway led by PTCL against the current practice of being handled by 14 long distance international operators.
The oil and gas sector’s fate was mixed as the industry dragged the market into the red zone on Wednesday but later recovered as traders expect healthy payouts in the upcoming financial results of Attock Refinery and National Refinery. The government released a favourable energy and power policy and cleared Rs80 billion worth of term finance certificates on behalf of the Oil and Gas Development Company; which resulted in the sector providing the final boost for the index to break the 52-week high barrier.
Aside from corporate excitement, politics also brought about minor reprieve as the prime minister was granted a lifeline in the National Reconciliation Ordinance (NRO) case. Other than this, inflation for August decline to stand at a 32-month low of 9.1%.
On the other hand, the fertiliser sector’s fate was adverse as declining sales figures of urea resulted in selling pressure. Decline in sales was attributed to pre-buying done earlier in the month in anticipation of the price hike. Moreover, the government issued a tender for the import of 300,000 tons of urea, which may dent local urea sales and the pricing power of local producers in short term, according to the note.
Outlook
The week forward is critical for the outperforming telecom sector as a double-edged sword could be in the making in the ICH issue for PTCL could swing the market either way. While majority of corporate results have been announced, certain blue-chips such as Pakistan Oilfields, Attock Petroleum, DG Khan Cement and Nishat Mills still have to unveil their results. Political uncertainty is likely to take a breather for now, as the can appears to be kicked down the road.
Winners of the week
Bata Pakistan Limited manufactures and distributes footwear. It is engaged in the sale of footwear along with accessories and hosiery items. Its major brands include Power, Weinbrenner, Marie Claire, Comfit and Bubblegummers.
Atlas Honda
Atlas Honda Limited manufactures and markets Honda motorcycles. Honda motorcycles are by far the largest selling motorcycles in the country. It is a joint venture between the Atlas Group and Honda Motor, Japan.
PTCL
The company provides telecommunication services in Pakistan. It owns and operates telecommunication facilities and provides domestic and international telephone services and other communication facilities throughout Pakistan.
Losers of the week
Jahangir Siddiqui & Company
The company is engaged in the trading of securities, maintaining strategic investments, consultancy services and underwriting. The company, together with its subsidiaries and associates, is engaged in banking, insurance, assets management, securities brokerage and principal investments.
Colgate Palmolive
The company is primarily engaged in the manufacture and sale of detergents, personal care and other related products. The products include toothpastes, tooth brushes, Azadi, Max Bar, Brite Maximum Power, Express Power and Bonus.
Indus Dyeing
Indus Dyeing and Manufacturing Company engages in the manufacture and sale of yarn in Pakistan. It offers cotton, melange, manmade fibre and core spun lycra, among other products, and exports primarily to the US, Japan, Hong Kong, Indonesia, Malaysia, and India.
Published in The Express Tribune, September 2nd, 2012.
Investor sentiments at the stock market remained buoyant with the bourse gaining 352 points or 2.3% during the week to close at the 15,391.58-point level as the bourse surged to a four-year high.
The bulls continued to push the stock market to new highs as euphoria related to the international telecom gateway promoted heavy buying in the telecom sector which kept the turnover ticking with support from index heavyweight oil and gas sector, said a KASB direct research note.
Though Wednesday’s session dampened investor sentiments, the bourse reached its climax on the last trading session of the week, climbing 132 points as Friday’s closing marks a re-run of levels last encountered in April, 2008.
Average daily volumes stood at 20.1 million shares traded per day, up 83.7%% over the previous week. As most of the increased activity was witnessed in the top-tier stocks; average daily volume rose only 94.2% to Rs1.4 billion worth of shares traded per day.
Pakistan Telecommunication Company Limited (PTCL) – stayed in the spotlight for the whole week –as investors disregarded the Competition Commission of Pakistan’s reservations on the formation of international clearing house (ICH) plan calling it anti-competitive. The largest and most liquid stock in the sector, PTCL, gained 18% week-on week and stood as the third highest gainer among the top 100 stocks, said the note.
The proposed ICH gateway will converge all international calls to a single technical gateway led by PTCL against the current practice of being handled by 14 long distance international operators.
The oil and gas sector’s fate was mixed as the industry dragged the market into the red zone on Wednesday but later recovered as traders expect healthy payouts in the upcoming financial results of Attock Refinery and National Refinery. The government released a favourable energy and power policy and cleared Rs80 billion worth of term finance certificates on behalf of the Oil and Gas Development Company; which resulted in the sector providing the final boost for the index to break the 52-week high barrier.
Aside from corporate excitement, politics also brought about minor reprieve as the prime minister was granted a lifeline in the National Reconciliation Ordinance (NRO) case. Other than this, inflation for August decline to stand at a 32-month low of 9.1%.
On the other hand, the fertiliser sector’s fate was adverse as declining sales figures of urea resulted in selling pressure. Decline in sales was attributed to pre-buying done earlier in the month in anticipation of the price hike. Moreover, the government issued a tender for the import of 300,000 tons of urea, which may dent local urea sales and the pricing power of local producers in short term, according to the note.
Outlook
The week forward is critical for the outperforming telecom sector as a double-edged sword could be in the making in the ICH issue for PTCL could swing the market either way. While majority of corporate results have been announced, certain blue-chips such as Pakistan Oilfields, Attock Petroleum, DG Khan Cement and Nishat Mills still have to unveil their results. Political uncertainty is likely to take a breather for now, as the can appears to be kicked down the road.
Winners of the week
Bata Pakistan Limited manufactures and distributes footwear. It is engaged in the sale of footwear along with accessories and hosiery items. Its major brands include Power, Weinbrenner, Marie Claire, Comfit and Bubblegummers.
Atlas Honda
Atlas Honda Limited manufactures and markets Honda motorcycles. Honda motorcycles are by far the largest selling motorcycles in the country. It is a joint venture between the Atlas Group and Honda Motor, Japan.
PTCL
The company provides telecommunication services in Pakistan. It owns and operates telecommunication facilities and provides domestic and international telephone services and other communication facilities throughout Pakistan.
Losers of the week
Jahangir Siddiqui & Company
The company is engaged in the trading of securities, maintaining strategic investments, consultancy services and underwriting. The company, together with its subsidiaries and associates, is engaged in banking, insurance, assets management, securities brokerage and principal investments.
Colgate Palmolive
The company is primarily engaged in the manufacture and sale of detergents, personal care and other related products. The products include toothpastes, tooth brushes, Azadi, Max Bar, Brite Maximum Power, Express Power and Bonus.
Indus Dyeing
Indus Dyeing and Manufacturing Company engages in the manufacture and sale of yarn in Pakistan. It offers cotton, melange, manmade fibre and core spun lycra, among other products, and exports primarily to the US, Japan, Hong Kong, Indonesia, Malaysia, and India.
Published in The Express Tribune, September 2nd, 2012.