Weekly review: KSE-100 closes lower amid profit-taking

Losses in the oil sector were offset by gains for the banking sector.


Bilal Umar July 25, 2015
Losses in the oil sector were offset by gains for the banking sector.

KARACHI:


The stock market witnessed high volatility ahead of the monetary policy announcement, which was due on Saturday, with investors booking profits at high levels, resulting in the benchmark KSE-100 index closing slightly lower by 72 points (0.2%) during the week ended July 24.


The decline came on the back of weakening global crude oil prices that pulled down the heavyweight oil and gas sector, but was offset by a strong performance by banking stocks. Volumes picked up sharply following the return to normal trading hours after Ramazan.

The week was curtailed to only three trading days after the extended holidays announced for Eid. The market kicked off on a solid note and closed above the 36,000-point barrier for the first time in history on Wednesday.

The euphoria was, however, short-lived as investors chose to book profits in the remaining two sessions which saw the KSE-100 index close at 35,815.2 points at end of trading on Friday.

Investors chose to be cautious ahead of the monetary policy announcement where status-quo was largely expected with few analysts also suggesting a surprise rate cut on the back of lower-than-expected inflation in the month of June. However, the status quo was maintained when the announcement was made on Saturday.

The decline in the index came despite some major positive developments in the political sphere as the judicial commission investigating rigging allegations in the 2013 elections issued a detailed report declaring the elections as free and fair. The report strengthened the mandate of the ruling PML-N party with the opposition PTI party accepting the decision.

The main culprit behind the decline was the continued decline in global oil prices following the Iran nuclear deal and the resolution of the Greek debt crisis. The oil and gas sector, which makes 21% of the KSE-100’s weight, dropped 2.6% after the price of WTI Crude fell below $50 during the week.

The oil sectors declines were partially offset by gains in the banking sector which reacted positively after a better-than-expected result announcement by United Bank Limited. Index heavyweights like MCB Bank and National Bank rose 3.5% and 6.4%, respectively, adding 105 points to the KSE-100 index.

Foreigners again turned sellers at the bourse, offloading a net of $7.9 million worth of equity during the week as opposed to $0.2 million net buying in the previous week.

Average daily volumes shot up by 37.8% and stood at 660 million shares traded per day. Volumes on Friday stood at 783 million shares traded which was a 10-year high for the market. Average daily values also rose 11.3% and stood at Rs16.3 billion per day.

The Karachi Stock Exchange’s market capitalisation stood at Rs7.71 trillion ($75.8 billion) at the end of the week.

Winners of the week

Sui Southern Gas Company



Sui Southern Gas Company Limited transmits and distributes natural gas, and constructs high pressure transmission and low pressure distribution systems. The company’s transmission system extends from Sui in Balochistan to Karachi in Sindh, located in Pakistan.

Orix Leasing



Orix Leasing Pakistan Limited is an leasing and diversified financial services company. The company offers full pay out finance leases for machinery, office automation, computers, vessels, aircraft and automobiles. Orix financial service products include loans, rentals, security brokerage, options trading and life insurance products.

Jubilee General Insurance Co



Jubilee General Insurance Company Limited is an insurance provider. The group supplies a number of lines of coverage, including health, fire, marine and miscellaneous.

Losers of the week

Punjab Oil Mills



Punjab Oil Mills limited manufactures and sells vegetable ghee, cooking oil, and laundry soap.

Murree Brewery



Murree Brewery Company Limited specialises in the manufacture of beer and Pakistan made foreign liquor. The group also has juice extraction and food manufacturing divisions, located at Rawalpindi and Hattar respectively. Their glass division manufactures all the group’s bottles and jars.

Shezan International



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

Published in The Express Tribune, July 26th, 2015.

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