THE Karachi stock market remained dull all through the week with the KSE-100 index showing a marginal decline of 38 points or 0.26 per cent over the earlier week.
The benchmark KSE-100 index settled at 14,526 points at the close of trading on Friday.
Average daily volumes dipped to 28-week low at 56 million shares, 53.7 per cent down over the earlier week. The activity remained range bound within the span of 129 points. “The reduced trading hours during the month of Ramazan, along with subdued trading interest by investors, resulted in dip in volumes at the local bourse,” a stock broker said.
Foreign investors were net buyers of $4.2 million worth of stocks during the week, which many market participants regarded as decent, although it stood sizably down over the foreign portfolio inflow of $10.8 million the previous week.
The news flow during the week was mixed. Investor sentiments were buoyed after indications that Pakistan would receive $1.2 billion in the near term under Coalition Support Fund (CSF). The anticipated standoff between the government and the Supreme Court over writing a letter to the Swiss authorities appeared to have been averted for now as the court extended the deadline by two weeks. But overall the market sentiment remained subdued on security concerns regarding NATO supply routes to Afghanistan.
In a sector specific development, Pakistan Telecommunication Company (PTCL) announced the launch of a second Voluntary Separation Scheme (VSS) for employees, which was feared to pose downside risk to financial year 2013 estimated earnings of the company, assuming a one-time outlay of around Rs21billion.
Meanwhile, the gas-related woes continued for the fertiliser sector. PSO’s circular debt issue and Engro (fertilizer subsidiary going for loan re-profiling) were also a drag on investor sentiments. On the macro front, the World Bank released a report in which it stated that Pakistan’s GDP may grow by 3.5 per cent in 2013.
According to analysts at the AKD Securities, the top three gainers during the week were EFoods, up by 3.1 per cent over the earlier week; D. G. Khan Cement higher by two per cent and Meezan Bank rising by two per cent.
Laggards included Honda Cars taking a plunge of 12.8 per cent over the previous week as the first quarter 2013 loss of the company multiplied by 4.3 times the same time last year. PTC dropped 4.9 per cent and Pak Suzuki Motor Company lost 4.3 per cent of the value.
The volumes leaders in the week included Jah.Sidd.Co, D. G. Khan Cement and JS Growth Fund.
The major corporate result in the week was that of Fauji Fertiliser Company (FFC) which posted above-expected second-quarter earnings at Rs5.08 per share. Earnings grew 58 per cent over the same quarter the previous year. The company also announced cash payout at Rs5 per share.
Regarding the outlook for the upcoming week, analysts at the KASB Research said low volumes during the first week of Ramazan, suggested that a similar picture could play out next week. However, the prospects of corporate earnings and cash payouts should keep investors active. Disbursement of CSF funds may be seen as a much needed development to ease investor sentiment on external account, lower fiscal pressures for the government and to replenish depleting foreign exchange reserves.
Analysts at the AKD Securities stated that as the result season was yet to kick off in full steam; in the immediate term the market sentiment could be dictated by developments on the political front and incoming inflation data. The inflation was thought to register at 10.6 per cent in July which might lead to calls for monetary easing in the SBP Monetary Policy Statement (MPS) to be announced in August.
Release of CSF from the US was also a key checkpoint with depleting foreign exchange reserves posing the main concern from the macro vantage, going forward. —Dilawar Hussain