Weekly review: Market recovers amid lowering of political tension

Activity in oil and gas sector was the highlight of the week.

KARACHI:

The stock market managed to make a decent recovery as political tension in the country subsided, resulting in the benchmark KSE-100 index climbing 652 points (2.3 percent) during the week ended June 27.

The market’s gain came after the index posted a decline of 1,039 points (3.5%) during the previous week after the start of the military operation in North Waziristan as well as political unrest in Punjab.

As tensions on both ends subsided, the market set about on a path of recovery and closed in the black in four out of the five days of the week to eventually finish at 29,343 points on Friday. The successful Secondary Public Offering (SPO) of Pakistan Petroleum Limited (PPL) and renewed foreign interest also aided the index’s recovery.

Initially, it appeared that the week would start off on a negative foot as the leader of the Pakistan Awami Tehrik (PAT), Dr Tahirul Qadri made his way to Islamabad to start what he claimed would be a revolution against the present government.

The KSE-100 dipped 170 points during early trading on Monday, but quickly recovered after tensions fizzled out by mid-day. The index managed to close with a gain of 307 points (1 percent) that day after a flurry of activity in the oil and gas sector. The sector remained in the limelight throughout the week as investor excitement towards the PPL SPO peaked and global oil prices shot up due to the crisis in Iraq. Investor activity in PPL’s stock remained high throughout the week and the SPO ended up being oversubscribed more than two time when it took place on Thursday.

Investor’s focus shifted towards the Oil and Gas Development Company on Friday as it is next in line for a secondary public offering by the government. The company’s share price grew 3.8 percent during the week and contributed 172 points to the KSE-100’s total gains.

Foreigners returned were net buyers of US $15.4 million worth of equity during the week, up from the paltry $3.6 million buying in the previous week. The continuation of foreign buying will be crucial to the index’s fortunes in the coming week.

On the macro front, the country’s foreign exchange reserves shot past US $ 14 billion and were recorded at $14.26 billion according to latest figures by the State Bank of Pakistan. The gains came after the receipt of $ 300 million from the privatisation of UBL and $ 230 million received from the World Bank. Average trading volumes improved slightly and stood at 159.8 million shares traded per day, up 4.9% over the previous week. Average daily values were up by 11.5% and stood at Rs8.24 billion per day. The market capitalisation of the Karachi Stock Exchange stood at Rs6.96 trillion at the end of the week.

Winners of the week

Shifa International Hospitals



Shifa International Hospitals Limited establishes and runs medical centres and hospitals in Pakistan. The Company’s clinical services include medicine, paediatrics, surgical, obstetric and gynaecology, dentistry, rehabilitation services and ophthalmology. Shifa also provides diagnostic services including specialised diagnostics, radiology and clinical laboratory.

Pakistan Cables Limited



Pakistan Cables Limited manufactures and distributes copper rods, wires, cables and conductors, aluminium profiles and anodized fabrications.

Lafarge Pakistan Limited



Lafarge Pakistan Cement Company Limited manufactures and sells cement.

Losers of the week

Colgate Palmolive



Colgate-Palmolive Pakistan Limited manufactures and sells detergents, personal hygiene, and a variety of other products.

TRG Pakistan



TRG Pakistan operates as an information technology company. The Company provides business support and software services to companies. TRG Pakistan manages call centers and offices located in Pakistan and elsewhere throughout the world.

PICIC Growth Fund



PICIC Growth Fund is a closed-end Fund registered in Pakistan. The Fund’s objective is to generate capital growth. The Fund invests in stocks listed at stock exchange.

Published in The Express Tribune, June 29^th, 2014.

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