KARACHI: The trading week that ended on Friday saw the KSE-100 index post staggering gains of 2,132 points or 4.5 per cent, which settled the benchmark at 49,709 points.

The upsurge in the index represented the highest-ever gain in a single week, after Dec 9, 2016, and included the addition of 2,834 points or 6pc to the benchmark in the last three trading sessions alone.

As the Panama Papers case unfolded, the market managed to convert the four-month selling spree into a relief rally and sprang surprises in the process.

It showed the biggest-ever intraday volatility of 1,668 points in the index on Wednesday as investors quickly changed bets on the Supreme Court’s verdict. It posted the highest-ever intraday gains of 1,906 points, moments after the announcement of a split verdict that fell short of disqualifying the prime minister.

As stashed away cash made its way into the market, the average daily volume surged to 278 million shares, up 62pc from the earlier week. The average traded value rose 81pc to $158m. Volume leaders during the week were mainly small-cap stocks: Engro Polymer and Chemicals 106m shares, TRG 99m shares, K-Electric 79m shares, Aisha Steel Mills 63m shares and Bank of Punjab 49m shares.

Foreign outflows intensified during the week and amounted to $31.97m against $2.84m a week ago. Foreign sell-off in the cement sector amounted to $10.9m while that in banks and fertilisers remained $7.5m and $5.3m, respectively. The power sector saw foreign buying of stocks worth $2.1m.

Among local participants, mutual funds were by far the lead buyers. They accumulated equities worth $78m and were followed by banks that bought shares valuing $6.6m. Conversely, individuals decided to take profits by the sale of shares worth $52m.

According to calculations by dealers at Arif Habib Ltd, the sector-wise contribution to the index was as follows: exploration and production 310 points, cements 288 points, commercial banks 272 points, fertilisers 272 points and oil marketing companies 204 points.

Stocks that contributed the most to the index included Hub Power, which added 154 points, UBL 131 points, Engro Corp 121 points, Pakistan Petroleum 113 points and Oil and Gas Development Company 91 points.

Dealers at Topline Securities said laggards of the week included MCB Bank, which went down 2.5pc, International Steels 5.2pc, Attock Refinery 5.6pc, Nestle Pakistan 1.1pc and Nishat Power 2.7pc. “In terms of price performance, Pak Elektron (12.6pc) and Sui Northern Gas Pipelines (12.3pc) were the best-performing stocks with the latter closing at an all-time high price of Rs153.78 per share,” they said.

Outlook: Market pundits are divided on the trend ahead. Some of them expect positive sentiments to prevail, driving both volume and value of stocks. The two-month respite until the final judgment in the Panama Papers case is being seen as an opportunity for investors, which can lead to higher volumes.

A bevy of big names is expected to unveil quarterly results. These companies include Indus Motor Company, Engro Fertilisers, MCB Bank, Nishat Mills, Maple Leaf Cement, Engro Corp, Mari Petroleum, Pak Suzuki Motor Company and Fuji Fertiliser Bin Qasim.

In the near term, budget proposals, introduction of a leveraged product and MSCI Emerging Market Index revision are expected to keep the momentum alive.

Some analysts cautioned that the market may remain under pressure as the coming week will be the rollover week for futures contracts.

Published in Dawn, April 23rd, 2017