Fears of NAB investigations and lack of triggers kept investors sidelined.
The stock market witnessed lacklustre trading ahead of Eid holidays, which shortened the week to three trading days, as lack of any significant triggers resulted in the benchmark KSE-100 index restricted to range-bound trading and closing with a gain of 61 points (0.2%) during the week ended September 23.
Investors remained concerned about ongoing investigations by the National Accountability Bureau (NAB) against several large brokers and remained sidelined throughout the week, resulting in lower volumes. The volatility in global crude oil price also took its toll on the market as the sector remained under pressure throughout the week.
The only bright spot for the market was the impressive earnings announcement by DG Khan Cement, which triggered a rally in the cement sector. However, that too was short-lived as investors eased off towards the end of the week with Wednesday being the last day for future rollovers.
The market opened on a negative note and plummeted by 287 points at the start of trading on Monday. Things turned around towards the middle of the day as news surfaced that the NAB had cleared one broker in their investigations. The index managed to close with a net gain of 65 points at the end of trading.
The positive mood spilled over into the following day as the cement sector rallied and investors bought shares at attractive valuations, which saw the KSE-100 index climb 55 points at the close of the day. However, the final trading day of the week was marred by selling in international markets and the KSE-100 fell 59 points on Wednesday to close at 32,822 points.
Global oil prices continued to play a big role in the market’s fortunes as crude oil traded in the $45 to $49 range during the week. The market responded to the dips and all three major oil companies, the Oil and Gas Development Company, Pakistan Petroleum and Pakistan Oilfields ended the week in the red. The oil sector’s losses were, however, partially offset by a small rally in the cement sector after DG Khan Cement announced earnings which were above market expectations. Maple Leaf Cement, Lucky Cement, Lafarge Cement and DG Khan Cement all closed positive with gains of 3.4%, 3.1%, 2.1% and 2.0% respectively during the week.
Foreigners continued to be net sellers at the bourse after offloading net equity worth $1.1 million during the week, on the back of $4.7 million net selling in the previous week. On the macroeconomic front, there were positive developments as Large Scale Manufacturing numbers for July 2015 showed growth of 4.67%, while Finance Minister Ishaq Dar left for the United States to kickoff roadshows to raise $1 billion by a Eurobond issue.
Average daily volumes continued to slide and stood at 124.2 million shares traded per day, down 8.1% over the previous week. Average daily values also fell 10.9% and stood at Rs5.6 billion per day. The Karachi Stock Exchange’s market capitalisation stood at Rs7.02 trillion ($67.4 billion) at the end of the week.
Winners of the week
The Searle Company Limited
The Searle Company Limited manufactures and sells pharmaceutical and healthcare products. The company also sells a range of food products and consumer items.
Bata Pakistan Limited
Bata Pakistan Limited manufactures and sells rubber, leather and microlon sandals and shoes.
Cherat Cement Company Limited
Cherat Cement Company Limited manufactures and sells cement and clinker.
Losers of the week
Punjab Oil Mills Limited
Punjab Oil Mills Limited manufactures and sells vegetable ghee, cooking oil and laundry soap.
Orix Leasing Pakistan Limited
Orix Leasing Pakistan Limited is a 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.
Oil and Gas Development Company
Oil and Gas Development Company Limited explores and develops oil and natural gas properties in Pakistan.
Published in The Express Tribune, September 25th, 2015.
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