KSE-100 posts strong gains of 454 points
The shares at the Karachi stock market took an uninterrupted flight to the North, adding a whopping 454 points to the KSE-100 index, starting from 16,602 on Monday and closing at 17,056 points at the end of week’s trading on Thursday.
As the bulls took firm control of the market, the index rose to its all-time high; the trend quite unlike the earlier week when the market had taken a roller coaster ride.
The gain of 2.7 per cent in stock prices during the week resulted in net return of 0.89 per cent year-to-date.
Analysts at brokerage JS Global stated that with relative calm on the political landscape after earlier week’s rising temperatures and the result season in full swing, bulls regained momentum at the local bourse.
While statements by the IMF mission over the weekend painted a gloomy picture of the economy, the market took comfort from the news that the IMF was willing to enter a programme with an interim government and Pakistan may resultantly avert the looming balance of payments (BoP) crisis.
Blue-chip, defensive stocks along with fundamentally strong second and third tier scrips remained in the limelight throughout the week.
The market took advantage of an amicable solution emerging from Dr Qadri’s long march. Talks with IMF concluded with a reiteration of the fund’s longstanding demands of monetary discipline, broadening tax net and greater flexibility on exchange rate, stated KASB Research.
The week, however, had a fair share of twists on politics as the rental power plant case got another layer added to it through the death of a NAB investigating officer.
Other news that influenced investor sentiments included first half financial year 2013 (1HFY13) fiscal deficit clocking in at 2.4 per cent; 1HFY13 textile exports rising by 8.6 per cent over the same time last year and T-bill yields taking a dip in the latest auction.
Equity dealer, Samar Iqbal at Topline Securities agreed that themarket had made phenomenal gains during the week due to decreasing political temperature and increasing expectations of healthy corporate earnings.
Stock strategists at brokerage AKD Securities stated that the strong performance during the week was despite Moody’s cautioning against the political noise while stating that an IMF programme looks essential for Pakistan (credit ratings were maintained at Caa1).
The market capitalisation of KSE rose by 2.85 per cent to Rs4.263 trillion, from Rs4.145 trillion at the start of the week. Foreign investors were net buyers picking up stocks worth $1.8 million during the week.
The rally was accompanied by broad based investor participation which shot up the average daily volume by 33.5 per cent to 200.2 million shares, compared to the earlier week’s volume at 150 million shares.
It was despite the curtailed four session week (Friday being a holiday) against full five sessions trading the earlier week.
Average trading value during the week stood at Rs4.263 billion, representing a huge increase of 61.6 per cent from Rs3.47 billion average daily traded value recorded the earlier week.
The biggest gainers for the week included PTCL, Adamjee Insurance, Honda Cars, Dawood Hercules, Bata (Pakistan), JS Growth Fund, Lafarge Pak Cement, Kot Addu Power, NBP; POL, OGDC and Nishat (Chunian).
The biggest losers during the week were Pak Services, Rafhan Maize, TriPack Films, Allied Rental Modaraba, Jubilee General Ins. Co,Askari Bank, Meezan Bank and UniLever.
The volume leaders during the week included Fauji Cement; Maple Leaf Cement; Jahangir Siddiqui & Co, Byco Petroleum; PTCL, TRG Pakistan and Engro Corporation.
During the week, two major companies declared financial results.
Fauji Fertiliser Company reported earning per share (eps) at Rs16.38 for 2012, which was seven per cent down over the earlier year and in line with analysts’ forecasts.
EFoods unveiled results on Thursday, reporting eps at Rs3.40, higher by a staggering 191 per cent over the previous year, which beat analysts’ expectations.
Future Outlook: The usual ebb and flow on politics was likely to keep playing with market sentiments.
However, KASB Research reckoned corporate results to come along in the forefront. Aside from Attock Group announcements due on Monday, other high profile names include Lucky Cement.
In addition to talks concerning the caretaker setup, a close tab on the rental power plant case (next hearing on January 28th) and the issue of the President’s dual office role, would be significant events to watch. Later down the week, January CPI reading would assist in molding discount rate expectations.
AKD Research stated that as the result season was building up steam, market performance next week would likely be driven by second quarter (2QFY13) results where cements and textiles in particular were due for strong postings.
“Going forward, result based rally will keep dominating the market as major companies will be announcing their December financial figures in the coming week”, said an equity dealer. — Dilawar Hussain