KARACHI: Stocks rallied during the outgoing week with the benchmark KSE-100 index peaking at an intra-day high of 40,082 points, crossing the milestone 40,000-mark.

The index closed trading on the last day of the week at a new all-time high of 39,908 points, representing gains of 518 points (1.3 per cent) over the week. Support came from selected scrips mainly in the banking, cement and the oil and gas Exploration & Production (E&P) sectors.

Foreigners were net sellers of $1 million worth of shares during the week. Oil & gas sector witnessed net foreign buying of $2.1m while cements saw a net outflow of $1.8m.

Average daily volumes of shares traded at the stock market witnessed an 18pc increase, with volumes clocking in at 265.1m shares. Volume leaders on the basis of average daily traded shares for the week were: KEL (239m shares), DSFL (95m shares), DCL (63m shares) and NIB (37m shares) and average daily trading values climbed 5pc, to Rs11.4bn.

Major contribution to the index moving upwards came from UBL, HBL, PPL, OGDC, POL, which added 396 points to the KSE-100 Index altogether. In the banking sector, HBL and UBL contributed 233 points. E&P scrips remained vibrant on the back of boisterous oil prices (WTI was up 4pc) fuelled by encouraging US inventory data and reports of an upcoming informal OPEC meeting. Scrip-wise, PPL, OGDC and POL contributed 70, 50 and 43 points to the index respectively.

“Amongst the major sectors, oil & gas exploration, commercial banks and pharmaceuticals were up 3.7pc, 2.6pc and 2.2pc respectively. On the flip side, tobacco and power generation & distribution were down 5.5pc, and 0.4pc respectively”, stated dealers at Topline Securities.

Top performers for the week according to AKD Securities were: APL, HCAR, POL and PPL which gained 6.8pc, 6.2pc, 5.8pc and 4.9pc. On the flipside, PTC, MCB, AGTL and NCL lost 6.9pc, 3.1pc, 2.9pc and 2.1pc over the week.

Key news flows during the week included: Overseas remittances during July clocked in at $1.66m, registering a 20pc YoY decline; government borrowing from the central bank shot to Rs786 billion in July against Rs113bn in same month last year; cement sales in the domestic market showed a healthy YoY increase of 12.4pc in July.

Outlook: Analysts and market watchers reckon that the ongoing result season continues to provide impetus to the market. “Key results could shape investor views specifically in the E&P, banking and cement sectors.” stated analysts at AHL Securities. The KSE-100 index is currently trading at a price-to-earnings (P/E) ratio of 9.6 times against the Asia Pacific regional average of 15 times while offering a 5pc dividend yield compared with a 2.4pc yield offered by the region.

Published in Dawn, August 14th, 2016