Weekly review: KSE closes flat after two days of turbulence

Court decisions dominated news flow during the week.

KARACHI:

The stock market experienced a turbulent couple of days during the week shortened by Eid holidays as judicial decisions took centre stage, resulting in the KSE-100 index closing flat with a gain of just 55 points (0.2%) to close at 30,158.

There were only two trading days at the bourse as the three-day Eid holidays kicked in on Monday. However, the benchmark index recorded significant turmoil in a short span of time as it fell below 30,000 points on Thursday before clawing back up on Friday.

The market opened on a negative note following the Peshawar High Court’s decision in the previous week that blocked the sale of shares in Oil and Gas Development Company Limited (OGDCL). The much-awaited book-building process of OGDCL’s shares was expected to start on Thursday but was delayed.

Declining global oil prices compounded problems for the oil and gas sector and led to selling in index heavyweights. OGDCL’s share price fell 2.6% while Pakistan Petroleum Limited saw a drop of 1.2% in its share price on Thursday.

However, it was again the courts that turned things around on Friday after the Supreme Court allowed the OGDCL book-building process to continue with a caveat that no share transfer would take place until a hearing at a later date. The news was well received and brought stability in the oil and gas sector.

At the same time, the Sindh High Court restrained Sui Southern Gas Company (SSGC) and the Oil and Gas Regulatory Authority (Ogra) from levying the gas infrastructure development cess, despite a presidential ordinance. The news proved to be a catalyst for the fertiliser and cement sectors, which are heavy consumers of gas.

The fertiliser sector got a further boost from the news that the Economic Coordination Committee had directed the Ministries of Industries and Petroleum to provide gas to the fertiliser plants on a top priority basis. Shares in Engro Fertilizer jumped 3.3% during the week as a result.

On the macro front, the country’s foreign exchange reserves received a boost after the United States disbursed $364 million under the Coalition Support Fund. The reserves rose $190 million to $13.4 billion, according to latest figures of the State Bank of Pakistan.

There was some bad news for investors as well as foreigners turned net sellers and offloaded $6.2 million worth of equity in just two days as compared to net buying of $9.4 million in the previous week. Average trading volumes jumped 50% and stood at 180 million shares per day, after heavy activity on Friday. Similarly, average trading values were also up but by 14% and were recorded at Rs7.6 billion per day. The market capitalisation stood at Rs7 trillion at the end of the week.

Winners of the week

JDW Sugar



JDW Sugar Mills Limited produces and sells crystalline sugar. The company is located in District Rahim Yar Khan and was formerly named United Sugar Mills Limited.

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.

Allied Rental Modaraba



Allied Rental Modaraba operates an equipment rental company. The company rents branded power generators, material handling equipment and construction machines for all types of applications.

Losers of the week

Oil and Gas Development Company



Oil & Gas Development Company Limited explores and develops oil and natural gas properties in Pakistan.

National Foods



National Foods Limited is a diversified food manufacturer. The group’s products include recipe blends, dehydrated vegetables, pickles, salts, snack foods, desserts, and a number of kinds of health foods.

TRG Pakistan



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

Published in The Express Tribune, October 12^th, 2014.

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