RECORDER REVIEW
KARACHI: The Karachi Stock Exchange witnessed another positive week ended on September 12, 2014 supported by foreign and local invertors’ interest in selected scrips.
The benchmark KSE-100 posted an increase of 531 points (WoW) to close at 30,045 points end of the last week compared to 29,514 points a week earlier. However, the lack of uncertainty on the political front kept the investors’ participation limited and it resulted in some decline in average daily volumes.
Average daily share trading volumes posted 26 per cent (WoW) decline to 131 million shares compared to 176 million shares in the previous week. While, the investors’ interest mostly skewed towards second tier stocks.
“The local bourse showed resilience during the week, as the KSE-100 closed up 1.8 per cent WoW despite overhang of political uncertainty and rising socio and economic concerns from massive flooding in the country,” said Raheel Ashraf, an analyst at JS global.
He said that auto sector remained in limelight given 76 per cent MoM rise in auto sales during Aug 2014, weak Japanese Yen vs. the US Dollar and potential delays in Punjab government’s yellow cab scheme.
Moreover, increase in total cement offtake by 23.3 per cent YoY in Aug-2014 and the anticipation of new drug policy attracted investors’ interest in their respective sectors, he added.
“Increase in trade deficit by 76.7 per cent YoY and 95.8 per cent MoM in Aug-2014, jump in remittances by 12.6 per cent YoY to $2.98 billion in 2MFY15 and decline in Banks NPLs by Rs10.6 billion to Rs612 billion in 1H2014 were other key highlights of the week”, he mentioned.
Followed by a positive trend, the market capitalization also posted an increase of Rs 72 billion or one per cent to reach Rs 7.014 trillion as on Sept 12, 2014 compared to Rs 6.942 billion a week earlier. Average daily value during the week was on decline (WoW) and stood at Rs 7 billion down from Rs 9.38 billion.
With slightly surge, foreign portfolio investment stood at $18.7 million against $18.65 million in a week earlier.
“Gains were primarily led by selected banking and oil stocks, which cumulatively contributed more than 250 points,” said an analyst at Elixir Securities.
The banking sector remained in the limelight during the week due to the expectations of increased yield on investment for the sector after the PIB auction, he said and added that interest was also evident in the oil sector (up two per cent) with OGDCL announcing a sizeable discovery in Saghri concession.
On the market outlook, an analyst at KASB commented that with the results season almost completed with the exception of Nishat Group companies, clarity on the political front and the impact of floods on different sectors would be key drivers of market direction going forward.
“We believe the discount rate will remain unchanged given the International Monetary Fund (IMF) pressure on the delay in the ongoing fourth review conclusion and increased risk of delays in structural reforms in the backdrop of political uncertainty and ongoing floods,” he said.
