Fertiliser and textile sectors help index reach greater heights.
The country’s stock market soared to new heights following a stream of positive news flows leading to the benchmark KSE-100 index climbing 386 points (1.6%) to storm past the 25,000-point barrier during the week ended December 13.
It is the first time, in the KSE-100’s 22-year history, that it has crossed 25,000 points. The index has put in a strong performance in 2013 and increased 9,149 points (42.3%) on its way to a record high of 25,256 points at the end of this week.
The past week saw a number of positive news flows for the fertilizer and textile sectors which aided the index in its record-breaking endeavour. Foreign buying also played its part in the index’s growth.
The star performer of the week was the fertiliser sector as Engro Fertilizer took centre-stage on news that the Ministry of Finance had agreed to supply its new Enven plant with gas from the Mari gas field, at a concessionary rate of 70 cents per mmbtu.
To recall, Engro’s new plant was to be offered gas at the same concessionary rate from the Sui Northern Gas Pipeline (SNGPL) network. However, due to SNGPL’s inability to provide the required gas, the company had to resort to converting its plant to work on gas from the Mari network.
Engro Fertilizers also announced that it will conduct the Initial Public Offering of the company’s stock in the upcoming week. The news resulted in heavy buying in Engro Corporation’s stock during the week.
The textile sector received good news in the form of the European Union (EU) parliament approving the GSP Plus status for the country. The status will allow for duty-free and preferential rate exports to the EU for the next 10 years.
It is expected that the status will result in the country’s exports jumping $2 billion annually. Textile shares jumped on the approval led by Nishat Chunian and Nishat Mills, both of which rose 8.2 and 6.2% respectively during the week.
Foreign buying remained intact as foreigners were net buyers of $6.07 million worth of equity. Total foreign buying for the year currently stands at slightly more than $400 million, up 212% over the previous year.
The gains came despite more negative macroeconomic data. The country’s foreign exchange reserves dipped to $8.06 billion; of which only $2.96 remain in the State Bank’s hands. The country’s trade deficit stood at $7.74 billion for the first five months of the current fiscal year, which is a slight improvement as compared to the same period, last year.
Average trading volumes improved 8.7% and stood at 211.2 million shares traded per day. Average daily value on the other hand fell 15.6% and stood at Rs8.83 billion traded per day. The market capitalisation of the KSE stood at Rs6.09 trillion.
Winners of the week
Agard Nine
Azgard Nine Limited manufactures and exports textile products such as denim fabrics, and apparel. The Company also manufactures and sells urea and phosphatic fertiliser from its fertiliser plants.
Mari Gas
Mari Gas Company Limited specializes in the drilling, production and selling of natural gas.
Engro Foods Limited
Engro Foods Ltd. produces a wide range of dairy products. The Company’s products include Ice Cream, Flavoured Milk, Fruit Juices and Milk Powders.
Losers of the week
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.
Hum Network Limited
Hum Network, Ltd. operates satellite television channels. The Company operates a channel targeted primarily at women, one about food, and one that covers lifestyle and entertainment.
Nestle Pak Limited
Nestle Pakistan Limited 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.
Published in The Express Tribune, December 15th, 2013.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ