Weekly review: KSE-100 crosses 30,000 points to hit all-time high

Moody’s rating along with sustained foreign buying bolstered the market.

KARACHI:

The stock market burst into unchartered territories as the benchmark KSE-100 rose 907 points (3.1%) and shot past the 30,000-point barrier to close at a new record high during the week ended July 18.

The index sustained its upward momentum from the previous week and crossed the 30,000 psychological barrier on Thursday after having flirted with it for the past couple of months. The KSE-100 index ended the week at a record high of 30,224 points on Friday.

The gains came on the back of the re-rating of the country’s economic outlook by ratings agency Moody’s and sustained buying by foreigners in the country’s stock market. Activity was witnessed in the Banking and Oil and Gas sectors throughout the week, with both sectors providing the bulk of the KSE-100’s gains.

The week started off on a great note after news that Moody’s had upgraded the country’s economic outlook from Negative to Stable. The decision to upgrade the rating came because of the country’s improved foreign exchange reserves position and the government’s continued efforts to enact the reforms suggested by the International Monetary Fund. The ratings upgrade had an immediate impact on the market as the KSE-100 rose by 387 points (1.32%) on Monday alone. The index remained range-bound on Tuesday and Wednesday, making small gains before setting off towards shattering the 30,000 points barrier on Thursday.

On Thursday, Moody’s announced that it was upgrading the outlook of 5 major Pakistani banks from Negative to Stable, resulting in heavy buying in the banking sector. The rally was supported by heavy buying in the oil and gas and cement sectors. The KSE-100 index rose 400 points (1.35%) to close at 30,177 points on Thursday.

Some profit-taking was witnessed on Friday, especially in the banking sector, but was offset by gains in the oil and gas sector. The index ended the week with a small gain and closed at its highest level yet.

Foreign buying continued unabated as foreigners were net buyers of equity worth $24.2 million during the week, up 192% over the previous week. The latest figures mean that foreign buying at the bourse is now touching $300 million for the year 2014.

The results season also kicked off during the week as Pakistan Telecommunication Limited announced its results for the half-year period ended June 30. The company posted earnings per share of Rs1.62 with a cash dividend of Rs1, largely in-line with market expectations. The earnings season is likely to provide triggers for the market in the coming weeks.

Activity also returned to the bourse as average daily volumes stood at 131 million shares, up 120% over the previous week. Similarly, average daily value also shot up by 175% and was recorded at Rs7.45 billion per day. The market capitalisation of the KSE stood at Rs7.08 trillion at the end of the week.

Winners

Cherat Cement



 

Cherat Cement Company Limited manufactures and sells cement and clinker.

Thal Limited



Thal Limited manufactures jute goods. The company also undertakes engineering projects.

ICI Pakistan



ICI Pakistan Limited manufactures a range of industrial and consumer goods. The company’s product line includes polyester staple fibers, POY chips, soda ash, paints, specialty chemicals, sodium bicarbonate, polyurethane, and adhesives. ICI Pakistan also manufactures pharmaceuticals and animal health products, and trades in various chemicals for use in industries in Pakistan.

Losers of the week

EFU General Insurance



 

EFU General Insurance Limited is an insurance provider. The Group supplies a number of lines of coverage, including fire, marine, aviation, transport, motor and miscellaneous.

Shezan International



 

Shezan International Limited manufactures and sells juices, beverages, pickles, preserves, and flavorings which are all derived from fresh fruits and vegetables.

Pakistan 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.

Published in The Express Tribune, July 20^th, 2014.

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