Weekly review: Index closes flat at the end of turbulent week

Political noise dominated proceedings at the bourse.

KARACHI: An extremely turbulent week at the bourse, shaped by political news from across the country, culminated with the benchmark KSE-100 index closing almost flat, down by 33 points (0.2%) at the 16,601 points level.

It was a crazy ride for the KSE-100, as an onslaught of political news day-after-day initially left it reeling, only to recover by the end of the week to close almost at the same level as its closing last week.

The week started on a negative note, in the aftermath of the killing of dozens of Hazaras in Quetta in a series of bombings, which led to the eventual dissolution of the Balochistan government and the imposition of governor rule in the province.

To add to that, the long march of Dr Tahirul Qadri kicked off on Monday, creating an air of uncertainty at the bourse regarding what would happen next. The investor’s concerns came true on Tuesday, though in the form of a ruling of the Supreme Court.

In the midst of all the commotion, the Supreme Court of Pakistan ordered the arrest of all 16 accused in the rental power scandal, including Prime Minister Raja Pervez Ashraf, who is former minister of the water and power ministry.

Uncertainty turned into panic, and the KSE-100 index plummeted more than 500 points (3.2%) in a span of minutes following the announcement. With the protestors of the long march demanding the dissolution of national and provincial assemblies, it seemed as if the government’s time was up.

However, in an interesting turn of events, the National Accountability Bureau refused to arrest the prime minister and requested for more time in producing documents pertaining to the case, leading to the adjournment of the hearing till January 23.

Furthermore, the Long March fizzled out in spectacular fashion, as the Islamabad cold kicked in and many protestors scattered. Unexpected support came in the form of the opposition parties who refused to side with an early removal of the government. At this point, the government offered to negotiate with Dr Qadri, which led to a resolution between both parties and the end of the long march.

The last three sessions of the week witnessed a slow and steady relief rally, peaking in the shortened session on Friday, with the index gaining around 300 points (1.9%), despite the murder of a prominent lawmaker of the Muttahida Qaumi Movement in Karachi.

The political news completely overshadowed other interesting news at the bourse, which included a reduction in the trade deficit in the month of December, and the country’s current account posting a surplus of $250 million in the first half of the current fiscal year.

Average daily volumes jumped 57% to 150 million shares traded per day during the week, although that was largely due to the knee jerk reactions throughout the week. Average daily values climbed by a much lesser 23% and stood at Rs3.47 billion per day. The market capitalisation of the KSE dropped 0.6% to Rs4.15 trillion at the end of the week.

Winners

TRG Pakistan



TRG Pakistan operates as an information technology company. The company provides business support and software services to companies. It manages call centres and offices in Pakistan and elsewhere throughout the world.

Fauji Cement



Fauji Cement Company Limited manufactures and sells cement.

Pak Services



Pakistan Services Limited is the holding company for Pearl Continental Hotels (Private) Limited, which constructs, operates and manages hotels. The group also owns a number of smaller companies that provide rent-a-car, travel arrangements and tour packages.

Losers

Rafhan Maize



Rafhan Maize Products Company produces corn oil, industrial starches, liquid glucose, dextrin, gluten meals, and other corn related products. The company also produces a wide range of co-products such as gluten feeds, meals, and hydrol.

ICI Pakistan



ICI Pakistan Limited manufactures a range of industrial and consumer goods. The product line includes polyester staple fibres, POY chips, soda ash, paints, sodium bicarbonate, polyurethane, adhesives, pharmaceuticals and animal health products.

Murree Brewery



Murree Brewery Company specialises in the manufacture of beer and Pakistan-made foreign liquor. The group also has juice extraction and food manufacturing divisions, located at Rawalpindi and Hattar.

Published in The Express Tribune, January 20^th, 2013.

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