Volumes dropped 33% as investors feared a delay in elections.
The KSE-100 index closed four of the five sessions of the week in the black, although the gains were much smaller than the previous week, before profit-taking was recorded on Friday. The index closed the week at 18,714 points, a new record high.
Average volumes dropped sharply by 33% to 141 million shares per day as political uncertainty prevailed in the country after nomination papers of some key figures and ex-parliamentarians were rejected by officers of the Election Commission of Pakistan due to various reasons.
The rejections sparked speculation that the elections were going to be delayed. However, appeals were filed by the candidates and a majority of the papers were accepted, or objections overruled, which led to an improvement in sentiment at the bourse.
The market’s gains were supported by continuous inflow of foreign funds as foreigners were net buyers of $6.3 million worth of equity during the week, following up on the $5.7 million worth of net buying in the previous week.
Remittance numbers for the first nine months of the current fiscal year also came to light during the week and stood at $10.3 billion for the period, up 6.4%. The numbers are a record high for the nine-month period.
There were several sector-specific news flows, which kept investors interested throughout the week and led to some activity at the bourse. On the energy and power side, the prime minister approved Rs20 billion to be arranged to tackle circular debt.
The news came at an important time as Hubco also demanded that the government clear Rs19 billion of its dues, which have led to shutdown of operations at its Narowal plant.
There were developments in the oil refinery sector as Pakistan State Oil and the government of Khyber-Pakhtunkhwa signed a memorandum of understanding to establish an oil refinery at a cost of $600 million in the province. Furthermore, Attock Refinery also signed a deal reportedly worth Rs18.6 billion with Hyundai Engineering to upgrade the capacity of its existing refinery.
Automobile manufacturers got some bad news as sales of locally manufactured cars dropped 25% in the first nine months of the current fiscal year. This was due to the relaxation in duties on imported used vehicles.
The decline in trading volumes meant that average daily values also fell and stood at Rs4.75 billion, down 39% over the previous week. Market capitalisation of the KSE rose 0.3% to Rs4.6 trillion.
Winners
Bata Pakistan
Bata Pakistan manufactures and sells rubber, leather, and microlon sandals and shoes.
Pak Services
Pakistan Services is the holding company for Pearl Continental Hotels (Private) , 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.
Pakistan Tobacco Company
Pakistan Tobacco Company manufactures and sells cigarettes.
Losers
Azgard Nine
Azgard Nine manufactures and exports textile products such as denim fabrics, and apparel. The company also manufactures and sells urea and phosphatic fertilisers from its fertiliser plants.
JS Bank
JS Bank is a full service commercial bank. The bank provides a wide range of banking products and services including retail and consumer, treasury, corporate and commercial, and investment banking.
Pakistan Reinsurance
Pakistan Reinsurance Company offers reinsurance and risk management services in Pakistan.
Published in The Express Tribune, April 14th, 2013.
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