Weekly review: KSE-100 inches towards 17,000 milestone

Activity remains lacklustre as investors stay on the sidelines.

KARACHI:

The stock market remained range-bound, yet continued to inch towards the 17,000-point milestone, as the benchmark KSE-100 index posted a gain of 78 points (0.5%) to close at 16,943 points during the week ended December 28.

The trading week was shortened by the holiday on December 25 on account of birth anniversary of the Quaid-e-Azam and Christmas. The remaining four sessions bore little as investors chose to remain on the sidelines with the market heading towards the end of the year.

It has been an impressive year for the Karachi Stock Exchange as the KSE-100 index has posted a growth of almost 50% since the start of the year. The index’s 12-month low was on January 12, 2011, when it stood at 10,909 points. It has climbed 6,034 points (55%) since.

In the absence of any significant triggers during the week, the trend of low volumes continuing for the last couple of weeks persisted and investors chose to book profits and invest in high dividend-yielding stocks like Hubco and Kapco.

Similarly, foreign investors decided to pull money out of the market before the end of the year and they were net sellers of $5.6 million worth of equity. However, the index still managed to climb compared to the previous week.

The biggest news of the week came towards the very end on Friday with the United States disbursing $688 million to Pakistan under the Coalition Support Fund. This payment was expected to be made in January and its early release could have a positive impact on the market in the coming week.

The disbursement will not only shore up the country’s current account, but will also provide support for the rupee, which had been on a constant slide in recent weeks. With two major repayments to the IMF coming up in January, the CSF disbursement could not have come at a better time.

There were some interesting developments on the treasury bill auction side, as the State Bank rejected all bids worth Rs84 billion. The news provided a signal to the market that the government wants another discount rate cut. However, with the rate now in single digit, the State Bank is unlikely to ease further.

Foreign exchange reserves rose by $169 million to $13.4 billion, after a series of declines. With the IMF payments coming up, the reserves are likely to come under pressure in the coming month.

Activity at the bourse remained low and stood at an average of 138 million shares per day, down 0.3% over the previous week. This activity was again skewed towards second and third tier stocks as average daily value declined by 12% to Rs3.08 billion per day. Market capitalisation rose 0.6% to Rs4.26 trillion by the end of the week.

Winners of the week



Ghani Glass

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



TPL Trakker

TPL Trakker is a vehicle tracking and fleet management service provider for markets in the Middle East and South Asian region. The company’s business is to supply GPS, GSM and satellite mobile asset tracking, management and information solutions.



Engro Foods

Engro Foods produces a wide range of dairy products. The company’s products include ice cream, flavoured milk, fruit juices and milk powders.

Losers of the week



PICT

Pakistan International Container Terminal operates a container shipping facility in Karachi, Pakistan.



IGI Insurance

International General Insurance Company of Pakistan provides property and casualty insurance products and services. The company’s products include fire, marine, and motor insurance.



JDW Sugar

JDW Sugar Mills produces and sells crystalline sugar. The company is located in Rahimyar Khan, and was formerly called United Sugar Mills Limited.

Published in The Express Tribune, December 30^th, 2012.

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