Regional markets: KSE-100 outperforms most in 2014-15
Barring China and Japan, KSE-100 index posted highest return; surged 15%.
KSE-100 Index outperformed most regional peers, gold, and average deposit rates by approximately 10%, 22% and 9%, respectively. PHOTO: INP
KARACHI:
Outperforming most regional markets, the benchmark index of the Karachi Stock Exchange (KSE) surged 15% in 2014-15.
The KSE-100 Index closed at 34,399 points on the last day of the outgoing fiscal year - up 14.9% from a year ago - which makes 2014-15 the sixth consecutive fiscal year when the stock market performance remained positive.
According to JS Global Capital research analyst Syed Atif Zafar, the KSE-100 Index outperformed most regional peers, gold, and average deposit rates by approximately 10%, 22% and 9%, respectively, over the 12-month period.
Zafar said the dollar-based KSE return clocked up at 12%, which was the third highest amongst Asian peers in 2014-15.
Top performers
The software and computer services sector posted the highest cumulative stock return in 2014-15, KSE data shows. Its return clocked up at 250% in the last fiscal year as opposed to a return of only 2% in 2013-14.
Read: Market watch: Banking sector fuels KSE’s thrust
It was followed by automobiles (93%), electricity (63%), life insurance (62%), household goods (61%), media (48%), cement (45%), chemical (40%), financial services (40%) and pharmaceutical (28%) sectors last year.
The worst performing sectors in 2014-15 were oil and gas (-26%), tobacco (-20%), telecom (-19%) and banks (-7%).
Stocks that yielded the highest returns in 2014-15 were Pak Elektron (236%), Kohinoor Textile Mills (170%), Maple Leaf Cement (154%), Indus Motor (148%), Honda Atlas Cars (135%), Fauji Cement (92%), Nishat Chunian Power (81%) and Hub Power Company (78%).
In contrast, Pakistan Tobacco (-31%), OGDC (-29%), Pakistan Oilfields (-24%), Pakistan Petroleum (-23), Allied Bank (-22%) and MCB Bank (-14%) remained the poor performers during the last fiscal year.
High turnover
The average daily turnover remained at the seven-year high of $109 million in 2014-15, up 28% on a year-on-year basis. It was as much as 72% higher than the five-year average of $63 million.
Similarly, the number of shares traded in 2014-15 averaged 219 million a day, which shows 37% rise over the five-year average of 160 million shares a day.
Read: KSE world's best performing frontier stock market: report
As far as the net foreign portfolio investment is concerned, it too improved to $47 million in 2014-15 as opposed to a meagre $1 million in the preceding fiscal year, Zafar noted. New listings also helped companies raise fresh capital from the equity market in 2014-15. There were as many as eight initial public offerings (IPOs) and two secondary offerings last year compared to four IPOs and two secondary offerings in 2013-14.
Way forward
According to Topline Securities senior research analyst Umair Naseer, improving macro-economic indicators and better visibility of Pakistan amongst foreign investors will help in the re-rating of Pakistan equities.
“In spite of three years of bull run, Pakistan trades at 32% discount to its Frontier Market (FM) peers in Asia,” Naseer said while referring to regional markets of Sri Lanka, Vietnam and Bangladesh. He also expects that the economic recovery, reduced global oil prices and a lower interest rate scenario can re-rate the Pakistan market from its historical average price-to-earnings ratio of 8.9 to 9-9.5 times.
The MSCI decision to add the MSCI Pakistan Index to the review list for a potential reclassification to Emerging Markets (EM) by 2016, foreign inflows, improving macros, better security situation and political noise will dictate the stock market direction going forward, Naseer added.
Published in The Express Tribune, July 1st, 2015.
Outperforming most regional markets, the benchmark index of the Karachi Stock Exchange (KSE) surged 15% in 2014-15.
The KSE-100 Index closed at 34,399 points on the last day of the outgoing fiscal year - up 14.9% from a year ago - which makes 2014-15 the sixth consecutive fiscal year when the stock market performance remained positive.
According to JS Global Capital research analyst Syed Atif Zafar, the KSE-100 Index outperformed most regional peers, gold, and average deposit rates by approximately 10%, 22% and 9%, respectively, over the 12-month period.
Zafar said the dollar-based KSE return clocked up at 12%, which was the third highest amongst Asian peers in 2014-15.
Top performers
The software and computer services sector posted the highest cumulative stock return in 2014-15, KSE data shows. Its return clocked up at 250% in the last fiscal year as opposed to a return of only 2% in 2013-14.
Read: Market watch: Banking sector fuels KSE’s thrust
It was followed by automobiles (93%), electricity (63%), life insurance (62%), household goods (61%), media (48%), cement (45%), chemical (40%), financial services (40%) and pharmaceutical (28%) sectors last year.
The worst performing sectors in 2014-15 were oil and gas (-26%), tobacco (-20%), telecom (-19%) and banks (-7%).
Stocks that yielded the highest returns in 2014-15 were Pak Elektron (236%), Kohinoor Textile Mills (170%), Maple Leaf Cement (154%), Indus Motor (148%), Honda Atlas Cars (135%), Fauji Cement (92%), Nishat Chunian Power (81%) and Hub Power Company (78%).
In contrast, Pakistan Tobacco (-31%), OGDC (-29%), Pakistan Oilfields (-24%), Pakistan Petroleum (-23), Allied Bank (-22%) and MCB Bank (-14%) remained the poor performers during the last fiscal year.
High turnover
The average daily turnover remained at the seven-year high of $109 million in 2014-15, up 28% on a year-on-year basis. It was as much as 72% higher than the five-year average of $63 million.
Similarly, the number of shares traded in 2014-15 averaged 219 million a day, which shows 37% rise over the five-year average of 160 million shares a day.
Read: KSE world's best performing frontier stock market: report
As far as the net foreign portfolio investment is concerned, it too improved to $47 million in 2014-15 as opposed to a meagre $1 million in the preceding fiscal year, Zafar noted. New listings also helped companies raise fresh capital from the equity market in 2014-15. There were as many as eight initial public offerings (IPOs) and two secondary offerings last year compared to four IPOs and two secondary offerings in 2013-14.
Way forward
According to Topline Securities senior research analyst Umair Naseer, improving macro-economic indicators and better visibility of Pakistan amongst foreign investors will help in the re-rating of Pakistan equities.
“In spite of three years of bull run, Pakistan trades at 32% discount to its Frontier Market (FM) peers in Asia,” Naseer said while referring to regional markets of Sri Lanka, Vietnam and Bangladesh. He also expects that the economic recovery, reduced global oil prices and a lower interest rate scenario can re-rate the Pakistan market from its historical average price-to-earnings ratio of 8.9 to 9-9.5 times.
The MSCI decision to add the MSCI Pakistan Index to the review list for a potential reclassification to Emerging Markets (EM) by 2016, foreign inflows, improving macros, better security situation and political noise will dictate the stock market direction going forward, Naseer added.
Published in The Express Tribune, July 1st, 2015.