RECORDER REVIEW
KARACHI: The Karachi stocks market ended the week on a positive note with KSE-100 index gaining 2.7 percent to close at 33,235 points compared to 32,351 of the preceding week.
The daily trading volumes averaged on 296 million shares, registering an increase of 23 percent, Week-on-Week (WoW).
The inflows of foreign portfolio investment amounted to $ 7.4 million (net) compared to $ 6.4 million outflows the market braved in the preceding week. “Investors took optimism from the Finance Minister’s interview in London where he hinted at a possible discount rate cut in the upcoming Monetary Policy in May,” viewed Raheel Ashraf of JS Global.
Other triggers, he said, were the Chinese President’s long-awaited visit on Monday, where a number of power and infrastructure projects bilateral agreements worth $ 50 billion are expected to be signed, and Moody’s highlighting HBL’s divestment as a credit positive for Pakistan’s economy.
The oil refineries rallied during the outgoing week on strong financial results for 3QFY15 and expectations of improving GRMs.
“(The) index revamped amid strong economic growth ahead,” said equity analyst Abdul Azeem, adding the market participants cheered the country’s largest equity transaction of the HBL worth $1.02 billion.
The index, however, faced a pressure in the early part of the week as investors booked profits amid political uncertainty, observed Azeem.
But, in the later half, the investors’ participation improved in the market on the back of reports of Chinese president’s arrival which is bound to encourage the stock investors to take new positions in cement and energy sectors.
“The benchmark index recovered quickly owing to strong fundamentals,” he added.
The market regained a momentum and bounced back by staggering 3,000pts in the last 13 trading sessions.
Moreover, he said, the week saw a lot of macroeconomic data surfacing that impacted sentiments thus influenced the index.
The central bank released the worker remittances figure for 9MFY15 in which overseas Pakistanis sent $13.38 billion as compared to $11.59 billion in the same period last year, an increase of 15.54 percent, YoY.
“The increasing remittances depict the augmenting confidence of overseas Pakistanis on the economic struggle of the government,” opined Azeem.
The foreign direct investment of $710 million remained stagnant for 9MFY15 due to what the analyst said political uncertainty and terrorism. “However, based on the current situation we expect the FDI to improve in future,” he said.
The country’s trade deficit for 9MFY15 went up by 15.4 percent, YoY, amid deteriorating exports.
Other key highlights of the week were the government receiving $1.6 billion offers for its $1.02 billion divestment in HBL, the rejection of government’s review petition relating to verdict on GIDC by Supreme Court, the Senate passing Securities Bill 2014, oil prices touching their 2015 peak and World Bank projecting Pakistan’s FY15E GDP growth at 4.4 percent.
Going forward, the market observers believe, the bourse would move upward on account of upcoming result season that is just around the corner.
The future journey of the index would be extremely sensitive to corporate results, they said.
