Weekly review: KSE-100 gains 276 points after positive news flow
Volumes tumbled 33.6 per cent at the outset of Ramazan.
KARACHI:
The stock market continued its ascent towards the 30,000-point barrier after positive news flows resulted in the benchmark KSE-100 index climbing 276 points (0.9%) during the week ended July 4.
The gains came on the back of the successful Secondary Public Offering (SPO) of Pakistan Petroleum Limited (PPL), which sparked interest in the energy and power sector and also the release of the 4th installment by the International Monetary Fund (IMF) under the Extended Fund Facility (EFF).
The week started off on a positive note after the SPO of PPL concluded with the strike price being set at a premium to the market price of PPL’s stock. Investors reacted positively to the news and a flurry of activity was witnessed in both PPL’s and the Oil and Gas Development Company’s (OGDC) stocks.
The OGDC is next in line to be privatised by the government and investors now anticipate that its strike price will also be set at a premium to the market price. The OGDC alone contributed 68 points to the KSE-100’s gains during the week while PPL contributed 54 points.
Other than the opening day of the week, the market remained range-bound and did not make much of an impression as volumes dried up in the reduced trading hours of Ramazan. After climbing 310 points on Monday, the index declined slightly over the remaining days to close at 29,619 points on Friday.
The approval of the 4th tranche under the EFF towards the end of the week was well-received by investors, with the IMF giving its nod of approval to the government’s economic policies. The receipt of $555 million under the tranche will also boost the country’s foreign exchange reserves, which fell $273 million to $13.99 billion, according to the latest figures.
Foreigners continued to remain active at the bourse, purchasing a net of $18.6 million worth of equity during the week, following up on the $15.4 million net buying in the previous week. Since the increase in Pakistan’s weight in the Morgan Stanley Capital International’s frontier market portfolio last month, foreign buying has remained healthy.
In company specific news, the Hub Power Company was the biggest gainer after it announced that the Federal Bureau of Revenue will refund Rs1.6 billion to the company after a Supreme Court decision on a withholding tax dispute went in the company’s favour. The company’s share price jumped 6.6% during the week and contributed 65 points to the KSE-100’s gains.
On the flipside, there was bad news for Engro Fertilizers and Fatima Fertilizers after the government imposed Rs300 per Million British Thermal Unit Gas Infrastructure Development Cess on all fertilizer plants. The two companies were earlier exempted from this levy due to an agreement with the government. The share prices of both companies fell 4.1% and 5.4% respectively during the week.
Average trading volumes dropped 33.6% to a paltry 106 million shares traded per day, largely due to the beginning of Ramazan. Similarly, average daily values also fell 28.4% to Rs5.9 billion per day. The market capitalisation of the Karachi Stock Exchange stood at Rs6.98 trillion at the end of the week.
Winners of the week
Shezan International
Shezan International Limited manufactures and sells juices, beverages, pickles, preserves, and flavorings which are all derived from fresh fruits and vegetables.
Thal Limited
Thal Limited manufactures jute goods. The company also undertakes engineering projects.
Packages Limited
Packages Limited manufactures and sells paper, tissue products, paper board and packaging materials. The Group has joint venture agreements with Tetra Pak International, to manufacture paper for liquid food packaging, the Mitsubishi Corporation, to manufacture polypropylene films, and Printcare (Ceylon) limited, to produce flexible packaging materials in Sri Lanka.
Losers of the week
Pakistan Tobacco Limited
Pakistan Tobacco Company Limited manufactures and sells cigarettes.
Javedan Corporation
Javedan Corporation Limited manufactures Portland cement, blast furnace slag cement and sulphate resisting cement.
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.
Published in The Express Tribune, July 6th, 2014.
The stock market continued its ascent towards the 30,000-point barrier after positive news flows resulted in the benchmark KSE-100 index climbing 276 points (0.9%) during the week ended July 4.
The gains came on the back of the successful Secondary Public Offering (SPO) of Pakistan Petroleum Limited (PPL), which sparked interest in the energy and power sector and also the release of the 4th installment by the International Monetary Fund (IMF) under the Extended Fund Facility (EFF).
The week started off on a positive note after the SPO of PPL concluded with the strike price being set at a premium to the market price of PPL’s stock. Investors reacted positively to the news and a flurry of activity was witnessed in both PPL’s and the Oil and Gas Development Company’s (OGDC) stocks.
The OGDC is next in line to be privatised by the government and investors now anticipate that its strike price will also be set at a premium to the market price. The OGDC alone contributed 68 points to the KSE-100’s gains during the week while PPL contributed 54 points.
Other than the opening day of the week, the market remained range-bound and did not make much of an impression as volumes dried up in the reduced trading hours of Ramazan. After climbing 310 points on Monday, the index declined slightly over the remaining days to close at 29,619 points on Friday.
The approval of the 4th tranche under the EFF towards the end of the week was well-received by investors, with the IMF giving its nod of approval to the government’s economic policies. The receipt of $555 million under the tranche will also boost the country’s foreign exchange reserves, which fell $273 million to $13.99 billion, according to the latest figures.
Foreigners continued to remain active at the bourse, purchasing a net of $18.6 million worth of equity during the week, following up on the $15.4 million net buying in the previous week. Since the increase in Pakistan’s weight in the Morgan Stanley Capital International’s frontier market portfolio last month, foreign buying has remained healthy.
In company specific news, the Hub Power Company was the biggest gainer after it announced that the Federal Bureau of Revenue will refund Rs1.6 billion to the company after a Supreme Court decision on a withholding tax dispute went in the company’s favour. The company’s share price jumped 6.6% during the week and contributed 65 points to the KSE-100’s gains.
On the flipside, there was bad news for Engro Fertilizers and Fatima Fertilizers after the government imposed Rs300 per Million British Thermal Unit Gas Infrastructure Development Cess on all fertilizer plants. The two companies were earlier exempted from this levy due to an agreement with the government. The share prices of both companies fell 4.1% and 5.4% respectively during the week.
Average trading volumes dropped 33.6% to a paltry 106 million shares traded per day, largely due to the beginning of Ramazan. Similarly, average daily values also fell 28.4% to Rs5.9 billion per day. The market capitalisation of the Karachi Stock Exchange stood at Rs6.98 trillion at the end of the week.
Winners of the week
Shezan International
Shezan International Limited manufactures and sells juices, beverages, pickles, preserves, and flavorings which are all derived from fresh fruits and vegetables.
Thal Limited
Thal Limited manufactures jute goods. The company also undertakes engineering projects.
Packages Limited
Packages Limited manufactures and sells paper, tissue products, paper board and packaging materials. The Group has joint venture agreements with Tetra Pak International, to manufacture paper for liquid food packaging, the Mitsubishi Corporation, to manufacture polypropylene films, and Printcare (Ceylon) limited, to produce flexible packaging materials in Sri Lanka.
Losers of the week
Pakistan Tobacco Limited
Pakistan Tobacco Company Limited manufactures and sells cigarettes.
Javedan Corporation
Javedan Corporation Limited manufactures Portland cement, blast furnace slag cement and sulphate resisting cement.
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.
Published in The Express Tribune, July 6th, 2014.