Weekly review: KSE-100 gains 150 points after positive week
The index crossed the 32,000-point barrier before profit-taking kicked in.
KARACHI:
The stock market continued to break records as the benchmark KSE-100 index rose another 150 points (0.5 percent) to close at 31,494, spurred by the central bank’s decision to slash the discount rate by 50 basis points, bringing it down to 9.5%.
The rate cut, which was the catalyst for the market’s gains in the previous week, was expected after inflation numbers for the month of October clocked in at 5.8%. However, market participants responded positively and pushed the index upwards in the opening sessions of the week before profit-taking resulted in the KSE-100 ending the week with clipped gains.
The week started off on a bright note as the KSE-100 index shot up by 358 points (1.1%) in response to the discount rate cut. Buying was witnessed across the board with healthy trading volumes. The trend continued on Tuesday as the index rose another 304 points (1%) to end the day above 32,000 points for the first time in history. That is when profit-taking kicked in and the index shed all of its gains in the next two sessions, falling 677 points (2.4%). The situation was made worse due to the Securities and Exchange Commission of Pakistan suspending trading for one of the largest brokerage houses in the country, which created confusion and chaos in the market.
The final session of the week saw a decent recovery as the index gained 255 points (0.8%) to end the week at a new record closing on Friday.
Other than the discount rate cut, the market was aided by the country’s improving macroeconomic situation which was highlighted by Standard and Poor’s when they announced that they were maintaining their short and long-term outlooks on the country.
Furthermore, the release of $1.1 billion by the IMF and the issuance of Sukuks amounting to $500 million by mid-December are expected to shore up the country’s foreign exchange reserves and stabilise the currency moving forwards.
In sector-specific news, the cement sector was again in the limelight with the discount rate cut and weakening coal prices resulting in improved outlook for the sector. On the other hand, the banking sector took a hit after the rate cut prompted a sharp decline in PIB yields, which will result in lower net spreads for banks.
Towards the end of the week, the Economic Coordination Committee announced that it had approved the increase in gas tariffs by up to 30%, which contributed towards the negativity in the second half of the week.
Foreigners continued to be net buyers, albeit with lower net buying, as they bought net equity worth $5 million during the week.
Average trading volumes fell slightly and stood at 259 million shares traded per day, down 8.6 over the previous week. Average daily also fell 3.3% and stood at Rs.15.09 billion per day. The KSE’s market capitalisation stood at Rs7.29 trillion at the end of the week.
Winners of the week
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.
Shezan International
Shezan International Ltd manufactures and sells juices, beverages, pickles, preserves, and flavorings which are all derived from fresh fruits and vegetables.
Jahangir Siddiqui and Company
Jahangir Siddiqui & Company Limited is an investment company, offering share brokerage, money market, advisory and consultancy, underwriting and portfolio management services.
Losers of the week
Archroma Pakistan Limited
Archroma Pakistan Limited manufactures textile and leather chemicals, dyes, pigment preparations, and master batches.
Pakistan Tobacco Company
Pakistan Tobacco Company Limited manufactures and sells cigarettes.
Bata Pakistan
Bata Pakistan Limited manufactures and sells rubber, leather, and microlon sandals and shoes.
Published in The Express Tribune, November 23rd, 2014.
The stock market continued to break records as the benchmark KSE-100 index rose another 150 points (0.5 percent) to close at 31,494, spurred by the central bank’s decision to slash the discount rate by 50 basis points, bringing it down to 9.5%.
The rate cut, which was the catalyst for the market’s gains in the previous week, was expected after inflation numbers for the month of October clocked in at 5.8%. However, market participants responded positively and pushed the index upwards in the opening sessions of the week before profit-taking resulted in the KSE-100 ending the week with clipped gains.
The week started off on a bright note as the KSE-100 index shot up by 358 points (1.1%) in response to the discount rate cut. Buying was witnessed across the board with healthy trading volumes. The trend continued on Tuesday as the index rose another 304 points (1%) to end the day above 32,000 points for the first time in history. That is when profit-taking kicked in and the index shed all of its gains in the next two sessions, falling 677 points (2.4%). The situation was made worse due to the Securities and Exchange Commission of Pakistan suspending trading for one of the largest brokerage houses in the country, which created confusion and chaos in the market.
The final session of the week saw a decent recovery as the index gained 255 points (0.8%) to end the week at a new record closing on Friday.
Other than the discount rate cut, the market was aided by the country’s improving macroeconomic situation which was highlighted by Standard and Poor’s when they announced that they were maintaining their short and long-term outlooks on the country.
Furthermore, the release of $1.1 billion by the IMF and the issuance of Sukuks amounting to $500 million by mid-December are expected to shore up the country’s foreign exchange reserves and stabilise the currency moving forwards.
In sector-specific news, the cement sector was again in the limelight with the discount rate cut and weakening coal prices resulting in improved outlook for the sector. On the other hand, the banking sector took a hit after the rate cut prompted a sharp decline in PIB yields, which will result in lower net spreads for banks.
Towards the end of the week, the Economic Coordination Committee announced that it had approved the increase in gas tariffs by up to 30%, which contributed towards the negativity in the second half of the week.
Foreigners continued to be net buyers, albeit with lower net buying, as they bought net equity worth $5 million during the week.
Average trading volumes fell slightly and stood at 259 million shares traded per day, down 8.6 over the previous week. Average daily also fell 3.3% and stood at Rs.15.09 billion per day. The KSE’s market capitalisation stood at Rs7.29 trillion at the end of the week.
Winners of the week
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.
Shezan International
Shezan International Ltd manufactures and sells juices, beverages, pickles, preserves, and flavorings which are all derived from fresh fruits and vegetables.
Jahangir Siddiqui and Company
Jahangir Siddiqui & Company Limited is an investment company, offering share brokerage, money market, advisory and consultancy, underwriting and portfolio management services.
Losers of the week
Archroma Pakistan Limited
Archroma Pakistan Limited manufactures textile and leather chemicals, dyes, pigment preparations, and master batches.
Pakistan Tobacco Company
Pakistan Tobacco Company Limited manufactures and sells cigarettes.
Bata Pakistan
Bata Pakistan Limited manufactures and sells rubber, leather, and microlon sandals and shoes.
Published in The Express Tribune, November 23rd, 2014.