Weekly review: Lifeless market manages to cross 18,000 points

Lack of triggers resulted in investors remaining on the sidelines.

KARACHI:

Lack of triggers resulted in a dearth of activity at the stock market as the benchmark KSE-100 index remained range-bound throughout the week, yet finally managing to cross the 18,000-point barrier again following a snap rally on the final trading session of the week.

It was a topsy-turvy week for the bourse as investors initially chose to book profits during the week, before the bulls staged a small comeback and helped in capping the week in green, climbing 80 points or 0.4% to close at 18,043 points on March 29.

Things eased off on the political front after Mir Hazar Khan Khoso, a well-respected 84 year old retired judge, was elected as the caretaker Prime Minister of the country by the Election Commission of Pakistan (ECP) after a parliamentary committee failed to agree on who should be elected as the caretaker PM.

A committee, however, was successful in selecting Najam Sethi as the caretaker Chief Minister of Punjab, the only province which was yet to decide on a caretaker setup. With those issues concluded, the build-up towards general elections began as political parties began their campaigns.

On the macro front, the country made its scheduled payment to the Washington-based International Monetary Fund (IMF) of $144 million, without significantly impacting the Pakistani rupee, which depreciated 0.2% during the week against the greenback.

Foreigners continued to purchase equity at the bourse and were again net buyers of $2.2 million worth of equity during the week. This was, however, down significantly from the previous week, when $9.3 million worth of net buying took place.

On the corporate front, things were quiet as well, with the exception of a few stories which had a slight impact on the market.



The cement sector was at the forefront as rumours emerged that there would be a breakdown in cement prices, leading to a little panic selling in the sector. However, these rumours subsided towards the end of the week and the cement sector led the rally that was witnessed on Friday.

The telecom sector also received the limelight as the Supreme Court requested the Competition Commission of Pakistan to continue proceedings on the international clearing house (ICH) issue and resolve the matter in 30 days. This provided a breather to the sector and the Pakistan Telecommunication Company (PTCL) climbed 2.8% as a result.

The Hub Power Company also made a surprise announcement of the commencement of operations of its Laraib hydroelectric power project, more than two months ahead of schedule. However, the news could not create a stir at the market due to the company’s difficulties at its Narowal plant.

Average daily volumes dropped sharply by 18.7% to 151 million shares traded per day. Average daily values also declined 29% to Rs4.25 billion per day, reflecting investor bias towards second and third -tier stocks. The market capitalisation rose 1.5% to Rs4.45 trillion by the end of the week.

Winners

Nestle Pakistan



Nestle Pakistan manufactures, imports and sells dairy products, confectioneries, culinary products and fruit juices. The group’s products include milk, butter, cream, noodles, coffees, and dietary and infant products.

Shell Pakistan



Shell Pakistan markets petroleum and petrochemical products. The company also blends and markets different types of lubricating oils.

Unilever Pakistan



 

Unilever Pakistan manufactures and markets foods, beverages, detergents, and personal care products. The group’s products include tea, ice cream, cooking oils, margarine, specialised fats and oils, personal care products, and detergents.

Losers

Pakistan International Container Terminal



 

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

Bank of Khyber



The Bank of Khyber is a full-service bank. The bank provides consumer finance services, deposit accounts, foreign currency deposit accounts, and traveller cheques.

JS Growth Fund



 

JS Growth Fund is a closed-end fund incorporated in Pakistan. The fund’s objective is to provide capital appreciation and income. The fund invests in a diversified portfolio of equity securities listed in Karachi Stock Exchange. The fund may also invest in bank deposits on profit and loss basis, term finance certificates, commercial papers & CFS up to 25% of its capital.

Published in The Express Tribune, March 31^st, 2013.

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