Foreign investors’ interest in the local equity market; a bevy of healthy corporate results and relative calm on the political front saw the Karachi stock market mop up more gains with the KSE-100 index running up to another highest-ever level of 17,797.22 points.

The benchmark index added 319 points or 1.8 per cent during the week.

Foreign investors’ exuberance in the Pakistani equity market was evident from an inflow of a huge sum of $10.8 million during the week, compared with overseas investment amounting to $5.9 million the earlier week. The interest of foreign investors generally centered on the energy stocks, which showed a substantial upsurge in stock price of the largest oil & gas exploration and production company, Oil &Gas Development Company (OGDC), which because of its heaviest weight age in the KSE-100 index managed to dictate the direction of the market. The share in OGDC shot to its all-time high during the week.

The news flow mainly was in regard to the hearing and subsequent dismissal of the petition by Dr Tahir-Ul-Qadri by the Supreme Court of Pakistan. The petition challenged the composition of the Election Commission of Pakistan.

The negotiations between the Government, OGRA, oil marketing companies (OMCs) and petroleum dealers regarding increase in margins of OMCs and dealers and the balance of payment concerns with the IMF repayment of $145mn at the start of the week causing rupee/dollar parity to weaken further, were also major issues that remained in the spotlight during the week.

Although the SBP had kept discount rate unchanged in its monetary policy announced last week, the news was absorbed by the market for it was in line with expectations. Other key highlights of the week included news revolving round the oil marketing companies. The excitement on the OMCswas triggered by the reports of government considering an increase in marketing margins for key petroleum products which would meet a long-standing demand and provide earnings upside for both Attock Petroleum and PSO.

The market capitalisation of KSE rose by 1.9 per cent to Rs4.461 trillion on Friday, from Rs4.379 trillion at the close of the earlier week.

Daily average trading volumes during the week clocked in at 270million share, slightly lower than the average per day volume of 292.04 million shares last week with the highest business once again seen in the Telecom sector. Average daily traded value increased by 19.4 per cent to Rs6.81 billion, from Rs5.70 billion the previous week.

The stocks that posted the biggest gains during the week included Honda Cars, Nishat Chunian, Indus Motors, PTC, OGDC, Pak Suzuki Motor Company; Lucky Cement, Hub Power Company, D.G.Khan Cement; NBP, Attock Refinery, Nishat Foods, NetSol Technologies, Pak Services and Nishat Power.

The shares that showed major loses during the week included Sui Southern; Allied Bank and Askari Bank.

Volumes leaders during the week were Pakistan Telecom; TeleCard Limited; Fauji Cement, WorldCall Telecom, Jahangir Siddiqui & Co, Sui Northern Gas Pipelines and NIB Bank.

Some of the major companies announcing financial figures during the week included: D.G.Khan Cement posting earning per share (eps) at Rs6.65 for the first half of financial year 2013, showing an upswing by 128 per cent over the eps in the comparable period of last year. Habib Bank eps for 2012 rose by four per cent to Rs17.79 with the bank declaring cash dividend at Rs7.50 per share tied to a bonus issue at 10 per cent, PTC the telecom company for Oct-Dec 12 posted eps at Rs1.69, representing a huge rise of 497 per cent over financial numbers for the same period the earlier year; Allied Bank improved eps by 15 per cent to Rs12.34 for 2012, paying cash dividend at Rs 4.50 and bonus shares at 10 per cent. Engro Corporation showed a sharp fall of 83 per cent in eps at Rs2.61 for 2012 with no payout.

Future Outlook:The reporting season in full bloom, upcoming corporate results were expected to be the main drivers of the market in the week ahead. In this regard, key results to be unveiled during the week include those of Askari Bank, NPL, NESTLE, Fauji Cement, Meezan Bank; KAPCO, OGDC, NIB Bank, ICI, PSO, Indus Motors and Nishat Mills Limited.

Analysts at AKD Securities said that any adverse outcome of the next hearing  on the International incoming call rates (ICH) scheduled for February 18 could be a dampener for the Telecom sector. With a major installment of IMF, amounting to $417mn, due on Feb 26, the rupee could potentially face further downward pressure during the month. Analysts at KASB Securities analysts did not foresee any significant change in the noise on the political arena.—Dilawar Hussain