RECORDER REVIEW
KARACHI: Behaving what analysts said atypical of Ramazan in terms of trading turnover, the stocks market last week saw the KSE-100 index gaining 4.6 percent to close at 35,456 points, a historic high. JS analyst Raheel Ashraf attributed investors’ optimism during the week to economic positives like the International Monetary Fund clearing for Pakistan $506 million seventh tranche, CPI inflation clocking in much lower-than-expected at 3.16 percent YoY and the federal government’s failure to announce increase in gas tariffs from July 1.
“The market rebounded amid positive development on economic front,” said equity analyst Abdul Azeem.
While the daily trading volumes averaged on 356 million shares, down 0.5 percent WoW, the average traded value grew by 20 percent WoW. This, analysts said, signalled a shift towards the high cap stocks.
“The week followed the recent trend of high volumes, atypical of Ramadan,” viewed researchers at Arif Habib Limited Research.
The cement sector led the northward trend and remained in the limelight. The LUCK, CHCC and PIOC added 9.9, 8.7 and 10 percent, respectively.
The offshore investors returned as net sellers of portfolios worth $1.6 million compared to $ 16.1 million of a week earlier.
According to market observers, the Karachi equities marked the start of new fiscal year, FY16, in some style. The benchmark index’s closure at 35,456 points, they said, was marginally behind only Vietnam in terms of returns.
The index ranked 2nd outperforming 3rd placed country, Iceland, by 2.7pc.
Key highlights of the week were signing of Framework for Asian Infrastructure Investment Bank (AIIB), government releasing Rs437 billion in FY15 under PSDP against the approved Rs525 billion, FBR provisionally collecting Rs2.58 trillion versus its revised target of Rs2.61 trillion, the government taking a hit of Rs2.5 billion for keeping petroleum products prices intact, China’s firm offering $50 billion for hydro-electric projects and Crescent Steel (CSAP) getting Rs2.5 billion contract from the SNGPL.
About future outlook, Abdul Azeem said, positives like over $ 18 billion record foreign reserves, squeezing fiscal deficit, implementation of necessary economic reforms, praise from the lenders (IMF and ADB) and an expected shift to the emerging from frontier market pointed towards a positive future for the country’s economy.
“We foresee a positive journey for the Karachi stock market. Investors remain optimistic regarding the corporate results and it is pertinent to mention that the future journey of the index will be highly sensitive to the market,” said the analyst.
