KARACHI: Stocks ran out of steam at the end of the week as risk-averse investors decided to take profit. The Pakistan Stock Exchange’s benchmark 100-share index fell 36 points (0.09 per cent) during the week and closed at 39,152. The index, however, raised the year-to-date return to 19.1pc.

Average daily traded volume grew 7pc week-on-week to 207.1 million shares, with Sui Northern Gas Pipelines Ltd (SNGP; 85m shares), Dewan Farooque Motors Ltd (DFML; 48.6m) and Pak Elektron Limited (PAEL; 47.2m) being volume leaders. Average daily value fell 8pc to Rs13.2 billion.

During the week, Dawood Hercules Corporation (DAWH), Feroze1888 Mills Ltd (FML), Habib Bank (HBL), Pakistan Petroleum Ltd (PPL) and Engro Corporation (ENGRO) took away 230 points. In contrast, Lucky Cement (LUCK), Pakistan State Oil (PSO), National Bank of Pakistan (NBP), Hub Power Company (HUBC) and Bank Alfalah (BAFL) added 152 points.

Foreigner investors were net sellers of $11.5m worth of shares in the week. Dealers at brokerage Topline Securities observed that banks attracted the highest foreign interest with net buying of $9.5m, whereas oil and gas exploration and chemicals saw net outflow of $17.2m and $14m, respectively.

“Foreign investments picked up pace following re-entry into the emerging market club,” said analysts at AKD Securities. They identified leading gainers during the week as: Amreli Steels Ltd (ASTL; 10.7pc), Nishat (Chunian) Limited (NCL; 8.7pc) and Pak Suzuki Motor Company Ltd (PSMC; 7.1pc). The laggards were Fauji Fertiliser Bin Qasim Ltd (FFBL; 5.5pc), DAWH (5.2pc) and Hascol Petroleum Ltd (HASCOL; 3.7pc).

Analysts at JS Global stated investors’ attention during the week shifted towards low market cap stocks, resulting in an increase in average trading volumes while a stark decline was witnessed in average traded value.

Low market cap sectors such as gas utilities (+9pc), healthcare (+7pc) and autos (+4pc) remained in the limelight.

The oil and gas marketing, automobiles, and power generation and distribution were up 3.5pc, 3.4pc and 1.8pc, respectively. On the contrary, tobacco, oil and gas exploration and fertiliser scrips were down, 5.3pc, 1.6pc and 1.2pc, respectively. Commercial banks remained flat.

OUTLOOK: Developments in the real estate sector sparked heated debate post-budget as new taxes of 10pc were recommended on immovable property sold within five years of acquisition. Rumours had it that prices could be raised 10-12pc per year on deals enacted after July 1, 2016, which could result in flight of money to the capital market.

The results season would also kick off in the upcoming week and the monetary policy announcement was also due.

Most analysts have advised investors to accumulate fundamentally strong stocks. The KSE-100 index is currently trading at price-to-earnings multiple of 9.5 times 2016 earnings against Asia-Pacific regional average of 15.2 times, while offering 5pc dividend yield against 2.4pc presented by the region.

Published in Dawn, July 24th, 2016