Weekly review: KSE-100 gets battered as operation begins
Lahore incident and diminishing foreign interest contribute to market’s decline.
Lahore incident and diminishing foreign interest contribute to market’s decline.
KARACHI:
The stock market took a turn for the worse as the KSE-100 took a battering with the start of the military operation in North Waziristan. The benchmark index posted a decline of 1,039 points (3.5%) during the week ended June 20.
In the aftermath of the Karachi airport attack last week, the government and the armed forces unanimously agreed on launching a full-on offensive.
Despite widespread approval of the operation by political parties and commentators alike, the market did not receive the news well and witnessed four straight sessions in the red, before ending the week with a negligible gain on Friday. Market sentiment took a blow and trading volumes remained low throughout the week.
The start of the operation also had consequences on foreign participation at the market. Foreigners took a backseat and chose to wait and watch and were net buyers of only $3.6 million worth of equity as compared to $12.6 million in the previous week.
The mood at the bourse was not helped by the events in Lahore, where law enforcement agencies and members of a religious organisation clashed resulting in the death of 12 people. The ruling PML-N came under intense pressure over the incident which was viewed as reckless high-handedness by other political parties.
Amid the political unrest, there was bad news on the macro front as the International Monetary Fund (IMF) delayed the upcoming fourth review of the $6.7-billion loan program due to the government making slow progress in power sector reforms and burgeoning circular debt.
The return of the circular debt also bore bad news for the energy and power sector. Pakistan State Oil was worst hit as news emerged that the circular debt level had hit Rs350 billion. The company’s share price plummeted 8.2% during the week.
There were a few positives during the week as the government decided to lower the increase in the Gas Infrastructure Development Cess on feedstock gas prices announced in the budget. The announcement should positively impact the fertilizer, textile and cement sectors.
The country’s foreign exchange reserves grew by $114 million to $13.57 billion during the week and remained on track to cross $14 billion by the end of June, as claimed by Finance Minister Ishaq Dar.
Average trading volumes dropped sharply and stood at 152 million shares traded per day, down 29.3% over the previous week. Similarly, average daily values were also down by 26.7% and stood at Rs7.39 billion per day. The market capitalisation of the Karachi Stock Exchange fell to Rs6.78 trillion at the end of the week.
Winners of the week
Pak Suzuki Motors
Pak Suzuki Motor Company Limited manufactures, assembles and markets Suzuki cars, pickups, vans and 4 X 4 vehicles.
Colgate Palmolive
Colgate-Palmolive Pakistan Limited manufactures and sells detergents, personal hygiene, and a variety of other products.
Grays of Cambridge
Grays of Cambridge (Pakistan) Limited is a holding company. The company, through its subsidiaries, manufactures and exports sporting goods, specialising in hockey sticks.
Losers of the week
Muree Brewery
Murree Brewery Company Limited 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 respectively. Their glass division manufactures all the group’s bottles and jars.
Shell Pakistan
Shell Pakistan Limited markets petroleum and petrochemical products. The company also blends and markets different types of lubricating oils.
Pakistan Cables
Pakistan Cables Limited manufactures and distributes copper rods, wires, cables and conductors, aluminium profiles and anodised fabrications.
Published in The Express Tribune, June 22nd, 2014.
The stock market took a turn for the worse as the KSE-100 took a battering with the start of the military operation in North Waziristan. The benchmark index posted a decline of 1,039 points (3.5%) during the week ended June 20.
In the aftermath of the Karachi airport attack last week, the government and the armed forces unanimously agreed on launching a full-on offensive.
Despite widespread approval of the operation by political parties and commentators alike, the market did not receive the news well and witnessed four straight sessions in the red, before ending the week with a negligible gain on Friday. Market sentiment took a blow and trading volumes remained low throughout the week.
The start of the operation also had consequences on foreign participation at the market. Foreigners took a backseat and chose to wait and watch and were net buyers of only $3.6 million worth of equity as compared to $12.6 million in the previous week.
The mood at the bourse was not helped by the events in Lahore, where law enforcement agencies and members of a religious organisation clashed resulting in the death of 12 people. The ruling PML-N came under intense pressure over the incident which was viewed as reckless high-handedness by other political parties.
Amid the political unrest, there was bad news on the macro front as the International Monetary Fund (IMF) delayed the upcoming fourth review of the $6.7-billion loan program due to the government making slow progress in power sector reforms and burgeoning circular debt.
The return of the circular debt also bore bad news for the energy and power sector. Pakistan State Oil was worst hit as news emerged that the circular debt level had hit Rs350 billion. The company’s share price plummeted 8.2% during the week.
There were a few positives during the week as the government decided to lower the increase in the Gas Infrastructure Development Cess on feedstock gas prices announced in the budget. The announcement should positively impact the fertilizer, textile and cement sectors.
The country’s foreign exchange reserves grew by $114 million to $13.57 billion during the week and remained on track to cross $14 billion by the end of June, as claimed by Finance Minister Ishaq Dar.
Average trading volumes dropped sharply and stood at 152 million shares traded per day, down 29.3% over the previous week. Similarly, average daily values were also down by 26.7% and stood at Rs7.39 billion per day. The market capitalisation of the Karachi Stock Exchange fell to Rs6.78 trillion at the end of the week.
Winners of the week
Pak Suzuki Motors
Pak Suzuki Motor Company Limited manufactures, assembles and markets Suzuki cars, pickups, vans and 4 X 4 vehicles.
Colgate Palmolive
Colgate-Palmolive Pakistan Limited manufactures and sells detergents, personal hygiene, and a variety of other products.
Grays of Cambridge
Grays of Cambridge (Pakistan) Limited is a holding company. The company, through its subsidiaries, manufactures and exports sporting goods, specialising in hockey sticks.
Losers of the week
Muree Brewery
Murree Brewery Company Limited 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 respectively. Their glass division manufactures all the group’s bottles and jars.
Shell Pakistan
Shell Pakistan Limited markets petroleum and petrochemical products. The company also blends and markets different types of lubricating oils.
Pakistan Cables
Pakistan Cables Limited manufactures and distributes copper rods, wires, cables and conductors, aluminium profiles and anodised fabrications.
Published in The Express Tribune, June 22nd, 2014.