Weekly Review: KSE shrugs off Ramazan languor to kick-off upward trend
Index climbs 1.9% during the week with the help of earnings, foreign inflows.
Index climbs 1.9% during the week with the help of earnings, foreign inflows.
KARACHI:
The Karachi Stock Exchange shrugged off the Ramazan languor and extended its bullish run as the benchmark-100 share index closed up 1.9% in the week with the help of some foreign support, which were recorded at $13.5 million.
Average volumes clocked in 21% higher over the previous week; however sentiments towards the broader market remained jittery due to a few macroeconomic concerns such as schedule loan repayments of $680 million.
The week saw corporate earnings announcements from some of the big names listed on the index like the Attock Group where Pakistan Oilfields, Attock Refinery and National Refinery results missed street estimates, while Attock Petroleum reported earnings in line with market expectations and a bumper cash dividend plus a surprise 20% bonus issue. Among the banking sector, MCB announced a growth in earnings, beating the estimates regarding the sector.
On the macroeconomic front, Pakistan’s ongoing relationship with the International Monetary Fund (IMF) remained in focus this week, as two instalments (each of $145 million) of existing liabilities were repaid. Moreover, confirmation by the officials of the finance ministry over media reports that the Washington-based fund had agreed to increase the proposed loan package to Pakistan to $6.6 billion from $5.2 billion agreed upon in staff-level agreement in July gave a stimulus to the market. However, formal approval to the package will be given when the IMF board convenes its meeting in September.
Pakistan has to pay nearly $3 billion back to the IMF in the fiscal year 2013-14.
The KSE-100 index, despite a stellar opening to the week, witnessed a slowdown in activity and volatility towards the end of the week after the release of inflation figures for the month of July, which ticked up 8.3%, strengthening sentiments towards an interest rate hike by the State Bank of Pakistan, which will force investors to take new positions towards banking and cement stocks.
Cement stocks, which have been an investor favourite for quite some time now, dipped this week as pressure from the IMF for an interest hike and expectations towards monetary policy statement of the central bank due next week of an uptick forced investors to move positions from the highly-leveraged cement sector to banks as banking spreads will grow bigger.
Furthermore, activity churned up in the oil and gas sector due to tensions in the Middle East because of Egypt as investors expect the sector to rebound on the back of rising international oil prices.
Outlook
All eyes will be on the monetary policy announcement of the State Bank of Pakistan due next week where analysts expect an interest hike of 50-100 basis points in the discount rate. Corporate earnings will continue to influence the sentiments towards the index.
Winners of the week
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.
Pakistan International Container Terminal
Pakistan International Container Terminal operates a container shipping facility in Karachi, Pakistan.
IGI Insurance
International General Insurance Company of Pakistan Limited provides property and casualty insurance products and services. The company’s products include fire, marine, and motor insurance.
Losers of the week
Attock Refinery
Attock Refinery Limited, a subsidiary of the Attock Oil Company, specialises in the refining of crude oil.
NIB Bank
NIB Bank Limited is a commercial bank operating in Pakistan.
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.
Published in The Express Tribune, August 18th, 2013.
The Karachi Stock Exchange shrugged off the Ramazan languor and extended its bullish run as the benchmark-100 share index closed up 1.9% in the week with the help of some foreign support, which were recorded at $13.5 million.
Average volumes clocked in 21% higher over the previous week; however sentiments towards the broader market remained jittery due to a few macroeconomic concerns such as schedule loan repayments of $680 million.
The week saw corporate earnings announcements from some of the big names listed on the index like the Attock Group where Pakistan Oilfields, Attock Refinery and National Refinery results missed street estimates, while Attock Petroleum reported earnings in line with market expectations and a bumper cash dividend plus a surprise 20% bonus issue. Among the banking sector, MCB announced a growth in earnings, beating the estimates regarding the sector.
On the macroeconomic front, Pakistan’s ongoing relationship with the International Monetary Fund (IMF) remained in focus this week, as two instalments (each of $145 million) of existing liabilities were repaid. Moreover, confirmation by the officials of the finance ministry over media reports that the Washington-based fund had agreed to increase the proposed loan package to Pakistan to $6.6 billion from $5.2 billion agreed upon in staff-level agreement in July gave a stimulus to the market. However, formal approval to the package will be given when the IMF board convenes its meeting in September.
Pakistan has to pay nearly $3 billion back to the IMF in the fiscal year 2013-14.
The KSE-100 index, despite a stellar opening to the week, witnessed a slowdown in activity and volatility towards the end of the week after the release of inflation figures for the month of July, which ticked up 8.3%, strengthening sentiments towards an interest rate hike by the State Bank of Pakistan, which will force investors to take new positions towards banking and cement stocks.
Cement stocks, which have been an investor favourite for quite some time now, dipped this week as pressure from the IMF for an interest hike and expectations towards monetary policy statement of the central bank due next week of an uptick forced investors to move positions from the highly-leveraged cement sector to banks as banking spreads will grow bigger.
Furthermore, activity churned up in the oil and gas sector due to tensions in the Middle East because of Egypt as investors expect the sector to rebound on the back of rising international oil prices.
Outlook
All eyes will be on the monetary policy announcement of the State Bank of Pakistan due next week where analysts expect an interest hike of 50-100 basis points in the discount rate. Corporate earnings will continue to influence the sentiments towards the index.
Winners of the week
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.
Pakistan International Container Terminal
Pakistan International Container Terminal operates a container shipping facility in Karachi, Pakistan.
IGI Insurance
International General Insurance Company of Pakistan Limited provides property and casualty insurance products and services. The company’s products include fire, marine, and motor insurance.
Losers of the week
Attock Refinery
Attock Refinery Limited, a subsidiary of the Attock Oil Company, specialises in the refining of crude oil.
NIB Bank
NIB Bank Limited is a commercial bank operating in Pakistan.
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.
Published in The Express Tribune, August 18th, 2013.