KARACHI: The stock market started on a positive note and continued to climb despite choppy sessions throughout the week, gaining 369 points (0.74 per cent) to settle at 49,925.

The market was jittery amid ongoing negotiations between the Securities and Exchange Commission of Pakistan and stockbrokers over in-house financing. Though the benchmark KSE-100 index still crossed the 50K mark a couple of times during the week, it was unable to sustain the level due to technical resistance and profit-taking.

Investors’ response to corporate earnings announcements swayed greatly, with most continuing to favour higher payouts over earnings growth.

Market participation increased during the week with average daily turnover rising by 12pc week-on-week to 414.1 million shares. However, investor interest shifted away from large-cap stocks as average traded value fell by 9.5pc to $177.5m. Volume leaders for the week were Lotte Chemical (151.7m shares), K-Electric (130.9m), Power Cement (127m) and TRG Pakistan (116.5m).

Foreign investors turned net buyers after 13 weeks of persistent sell-off. The inflow of Foreign Investors Portfolio Investment during the week amounted to $5.4m against outflow of $15.3m the previous week. Major foreign buying was recorded in fertilisers worth $3.1m, commercial banks $2.3m, technology $1.2m and other sectors $3.7m. Among local participants, biggest buyers were mutual funds with net purchases of $9.4m during the week.

According to analysts, sectors that remained in the limelight during the week included the fertiliser sector, which added 167 points to the index, cement 127 points, commercial banks 108 points, textile composite 77 points, and engineering 51 points.

The fertiliser sector was driven by Engro which added 113 points. Habib Bank and United Bank contributed 86 and 72 points to the index. Cements remained positive on higher despatches and healthy outlook. Investors were also bullish on the steel sector due to imposition of anti-dumping duty on galvanised steel products. On the flip side, major laggards were telecommunication and electricity sectors.

Engro Corporation rose 6.2pc, Habib Bank 2.56pc, United Bank 3.23pc, DG Khan Cement 6.2pc and National Bank of Pakistan 8.64pc; they together added 400 points to the index.

Other top-performing stocks during the week were Lotte Chemical which increased 8.8pc, Amreli Steels 8pc and Nishat Mills 7.5pc. In contrast, PTCL dropped 4.6pc, Hub Power Company 4.2pc, Al-Ghazi Tractors 3.8pc and Allied Bank 3.7pc.

Key developments during the week were: Fauji Fertiliser’s 118-megawatt coal-fired power plant came on stream; Pak Suzuki launched 1.4-litre imported sedan Suzuki Ciaz; International Steels Ltd stated in a filing that the National Tariff Commission had decided to impose definitive anti-dumping duties on galvanised steel coils and sheets for five years; PSO’s receivables from different enterprises, particularly power companies, swelled to Rs277bn; overseas workers’ remittances during July-January were down 2pc year-on-year to $10.9bn; foreign exchange reserves fell to $22.03bn; and cement sales rose 7.45pc year-on-year in the seven months through January.

OUTLOOK: Market pundits foresee range-bound performance next week, with major activity revolving around the incoming results. Volatility is likely to be seen with the resumption of the Panama Papers hearing after a lapse of two weeks. It would have to be seen if the KSE-100 index manages to cut across the strong 50,000-point barrier, which would then set the direction of the market.

Published in Dawn, February 12th, 2017