Share values receded at the Karachi stock market in the week ended Friday.
But the slight decline of 33 points in the KSE-100 index, masks the turbulent nature of the market all through the week. The benchmark closed at 16,602 points.
The market appeared to be hostage to the quick developments on the political front. The week kicked off with the loss of life and sit-in by protesters in Quetta.
The incident resulted in dissolution of the provincial assembly.
Simultaneously, Dr Tahir-ul-Qadri, leader of a political party gave a call for ‘long march’ to Islamabad. Another major party—MQM expressed its resolve to join the march, which further created nervousness among stock investors.
Although, MQM latter backed out, Qadri was able to muster a considerably big crowd of followers, who staged a sit-in, close to the important buildings in Islamabad.
And in the midst of the crowd charged with the fiery speeches of Dr Qadri, came the quite unexpected order of the Supreme Court to arrest the country’s Prime Minister in a corruption case. That sent equities reeling down by 515 points, representingthe biggest single day decline in four years.
The situation cooled down a bit and the market got a respite towards the end of the week as the arrest of PM was deferred pending hearing of the case on Jan 23. Also negotiations with the long march leader were successful, bringing an end to the sit-in by protesters in the Islamabad.
Thus, the market recovered all but 32 points from the huge plunge of 515 points of Tuesday with the equities staging a spectacular rally of 310 points on Friday, despite nearly two hours early closure of the market due to strike in the city over assassination of a sitting member of Sindh Assembly.
Analysts at KASB Securities said that the political noise overshadowed other developments during the week, including current account data for December 12, posting a surplus; another roadblock for the 3G auction as PTA chairman was removed on the directives of the Lahore High Court; notification of wellhead gas prices; Pakistan-India tensions and finally the ongoing policy level talks with the IMF.
Analysts at JS Global stated that politics aside, the week was a reasonably positive one for the macro numbers though rupee weakness and discussions with the IMF remained weak links.
The market capitalisation of KSE was slightly reduced to Rs42.5 trillion on Friday, from Rs42.6 trillion at the start of the week.
As the day-traders and punters operated on both sides of the ring, the average daily volume jumped to 150 million shares for the week, up by a huge 56.6 per cent over the earlier week average volume of 95.8 million shares. Even institutions entered into brisk trading, taking profit at high levels and cherry picking at dips.
The turnover scaled up despite the early closure of the market on Friday, in mourning over the assassination of a member of the Sindh Assembly.
Trading value on average for a day during the week stood at Rs3.47 billion, recording an increase of 23.4 per cent over average daily traded value at Rs2.81 billion the earlier week.
Major gainers for the week were EFoods, Nishat (Chunian), Engro Polymer, TRG Pakistan, Fauji Cement, Pak Services, Packages Limited, Jahangir Siddiqui & Co, Lafarge Pak Cement, Attock Refinery and Pak Suzuki Motor Company.
The laggards for the week were OGDC; Habib Metropolitan Bank, Meezan Bank, Rafhan Maize Products, ICI Pakistan, Murree Brewery, TPL Trakker and Bata (Pakistan).
On top of the active issues during the week were: Fauji Cement Company, TRG, Byco Petroleum, Jah.Siddiqui & Co, Maple Leaf Cement, D.G.Khan Cement and NIB Bank.
Future outlook: The outlook for the week ahead was murky, with high profile rental power plant case pending with the judiciary and the suspense lingering over the care taker set-up. The heating up of political activity ahead of elections was also adding to the uncertainty.
Analysts at KASB Securities for the week ahead was focused on investor interest and outcome of the ongoing cases against the Prime Minister. However, the focus was likely to shift towards corporate results, as they gather steam over the next couple of weeks.
In addition, any talks on the caretaker setup were looked forward to trigger sentiments at the market. For the time being, Pakistan is not seeking an IMF bailout.
Investors were likely to keep an eye on the rental power corruption case, analysts at AKD Securities said. “They could react sharply again if the Supreme Court took a tough stance, seeking implementation of its order for arrest of the Prime Minister”, they predicted. In the upcoming week, key financial results announcement including those of LOTPTA; Fauji Fertiliser and EFoods could be harbinger of corporate results that would follow.—Dilawar Hussain