KARACHI: Except for the first day of the new year when stocks started out with a bang, the rest of the remaining days of 2015 in the week were uneventful and closed in range-bound trading.
The benchmark KSE-100 index easily leapt over the resistance level of 33,000 points on Friday to close at 33,229, representing gain of 728 points (2.24 per cent) for all of the week.
Overall, activity at the market posted moderate recovery on account of the holiday season; Average daily volumes increased 24 per cent to 113.7 million shares, while average daily value remained flat at Rs6.6 billion. It represented greater concentration of retail investors on small-cap stocks.
Foreigners were net sellers of $3.2m worth stocks during the week as against net outflow of $1.79m the week ago.
According to dealers at brokerage Topline Securities, major selling by foreign funds was seen in banks and oil and gas amounting to $7.3m and $2.7m, respectively while net buying of $3.2m in cement sector slowed down the overseas portfolio outflow.
During the week, Prime Minister’s inauguration of CPEC’s western route and impressive provisional December 2015 sales numbers injected interest in cement stocks (+5.7pc week-on-week.
Analyst at JS Global Faizan Ahmed said that Index heavyweight oil and gas stocks also recovered, led by PPL on news of 50pc increase in Sui gas field’s wellhead price and recent hydrocarbon discoveries.
Other positive news flow included Indian PM Modi’s surprise visit to Pakistan; foreign exchange reserves crossing $21bn; PM announcing Rs3 per unit cut in electricity tariff for industrial consumers; ECC approving 60mmcfd RLNG supply to the textile sector; Reduction in diesel prices; Ministry reassuring textile manufacturers about continuation of GSP Plus status; launching of the Voluntary Tax Compliance scheme by PM Sharif to regulate the undocumented economy and Futures Market Act 2015 (Draft) being forwarded to the Senate Standing Committee on Finance for deliberations.
According to brokerage KASB Securities, Pakistan Tobacco Company, Nishat (Chunian) Limited, Gul Ahmed Textile, Maple Leaf Cement and Kohinoor Textile were the major gainers while Associated Services Limited, Shifa International Hospitals Ltd, Ibrahim Fibers, Ghani Glass, and Indus Dyeing were the major losers in the benchmark KSE-100 during the week.
Giving a prognosis for the second week of the new year, analysts at AKD Securities said: “Flows from foreign investors may present a ‘wild card’ and reinvigorate the market.
As the global holiday season comes to an end, investors will be looking to realign their portfolio for entry into 2016. December 2015 inflation figures of 3.2 per cent year-on-year against consensus of 3.8pc are likely to rebuff expectations of tightening, extending the current cycle of cheap credit.
Published in Dawn, January 3rd, 2016
