Weekly Review: KSE-100 closes flat after eventful week

Initial losses were covered by gains later in the week.


Bilal Umar April 20, 2013
Initial losses were covered by gains later in the week.

KARACHI: An eventful week at the stock market came to a close with the benchmark KSE-100 index swinging wildly to close almost flat, posting a loss of 83 points (0.4%) during the week ended April 19.

Disappointing results from Pakistan Telecommunication Company Limited (PTCL) and Attock Group companies led to panic at the bourse early in the week, before strong earnings by blue-chip companies aided the index’s recovery and pushed it to close at 18,631 points.

The week opened on a negative note after PTCL announced its earnings for the first quarter of 2013. The earnings were being monitored closely by analysts from across the country, as they would provide an insight into the health of the telecommunications sector following the setting up of the controversial International Clearing House gateway.

After a strong fourth quarter in 2012, analysts were expecting PTCL to maintain the momentum and post earnings per share (EPS) of at least Re1. However, the company posted EPS of Rs0.65, way below expectations. The news resulted in a sell-off in the company’s stock, which fell almost 15% by the end of the week. The KSE-100 dropped 190 points (1%) on Monday alone.

Similarly, the Attock Group announced results for the third quarter of fiscal 2013 on Tuesday, which also came in below investor’s expectations. Pakistan Oilfields announced EPS of Rs36.46 for the nine months of fiscal 2013, and Attock Refinery Limited announced EPS of Rs37.94. Both stocks received a battering that day, which resulted in the KSE-100 index dropping another 162 points (0.9%) that day.

However, the index closed in the green in the last three sessions of the week, managing to claw back most of the losses and close the week modestly in the red. The losses of the first two days made valuations very attractive for investors and heavy buying was recorded, especially on Thursday.

Foreigners too got in on the act, and fetched equity worth a net $6.7 million during the week. Most of these purchases were in the banking and oil and gas sectors.

On the political front, the caretaker prime minister appointed Dr Shahid Amjad Chaudhry as finance adviser and in charge of the Ministry of Finance. He will lead the country’s talks with the International Monetary Fund (IMF) before the new government takes over. The premier reiterated the stance that the caretaker setup will not take any decision on entering a new loan programme with the IMF.

Engro Foods posted another set of strong results towards the end of the week, and managed to close at its upper circuit breaker. The banking sector also received a boost, as investors anticipate a hike in the discount rate in the second half of the year.

The recovery was also aided heavily by activity in the oil and gas sector, as the Oil and Gas Regulatory Authority increased well-head gas prices for several wells in its half-yearly review. The Oil and Gas Development Company, an index heavyweight, saw increased buying activity in its shares following the announcement.

Volumes picked up 15% during the week to 164 million shares per day on average, while average daily values jumped 31% to Rs6.21 billion. Market capitalisation of the KSE dropped 1% to Rs4.55 trillion.

Winners of the week

Murree Brewery

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

IGI Insurance

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.

Abbott Laboratories

Abbott Laboratories

Abbott Laboratories (Pakistan) manufactures, imports, and markets research-based pharmaceutical, nutritional, diagnostic, hospital, and consumer products.

Losers of the week

Pakistan Telecommunication Company

Pakistan Telecommunication Company

Pakistan Telecommunication Company provides fixed line domestic and international telephone services, telex, telegraph, fax and leased circuit services in Pakistan.

Askari Bank

Askari Bank

Askari Commercial Bank Limited provides commercial banking services. The bank has branches in Pakistan, Azad Jammu and Kashmir and Bahrain.

National Refinery

National Refinery

 

National Refinery manufactures and distributes lube base oils and petroleum fuels. The company markets its products to customers throughout Pakistan.

Published in The Express Tribune, April 21st, 2013.

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