Daily Times

Karachi: Pakistan equities during the outgoing week continued strong run with the benchmark KSE 100 gaining 2,116 points (4.9 percent) to close at all time high of 45,387 points on the back of sturdy oil prices, continued expansions in industrial sectors and announcements of corporate actions.

Positivity was seen on the back of factors such as record high utilization levels posted by cement manufacturers and strong liquidity position of local investors. KSE-100 index posted all time highs consecutively during the outgoing week.

The factors that contributed to the bullish trend included, Lucky Cement announced plans for entry into automotive business through setting up manufacturing plant in partnership with KIA Motors, furthering operations in Iraq while expressing intention to bid for DCL’s assets, keeping sentiment strong. Other announcements included TREET and ICI’s plans to invest in the pharma sector (Renancon and WYETH respectively), Shanghai Electric sharing a $9bn investment plan following KEL’s acquisition and BoD approval of MCB and NIB merger.

Apart from the corporate sector’s activities news inflow from the political front also affected the capital market including continuation of SC hearings for the Panama-gate case, with PM Sharif facing criticism from the court for failing to provide a money trail for asset purchases, cotton arrivals increasing 13.8 percent YoY for the
season, delay in bid opening process for the 40 percent divestment of PSX, said analysts at AKD Securities.

Also, the Fauji Cement Company announced approval of a Waste Heat Recovery Power Plant for line-1 Wartsila Captive Power Plant. This is likely to reduce the company’s dependence on the national grid, which will make it more cost efficient and will lead to margin accretion, in our view.

As per its third quarterly report the State Bank of Pakistan has increased the required Capital Adequacy Ratio (CAR) for banks to 10.65 percent, which will be implemented from the last day of the current calendar year. The current CAR requirement of 10.25 percent includes a capital conservation buffer (CCB) of 0.25 percent. The above increase is in line with an already announced timeline.

Average daily volumes for the outgoing week posted a decrease of 3 percent WoW to 393 million shares while average daily value increased 23 percent WoW to Rs19 billion/$177 million over the week.

Market leaders during the week were Lucky Cement, ICI, PIOC, FCCL and AICL while laggards were ASTL, EPCL, HASCOL, PSMC and LOTCHEM. Top three gainers over the outgoing week were Cement, Oil and Gas Exploration Companies and Commercial Banks sectors, which were up 11.4 percent, 6.7 percent and 4.1 percent respectively.

While top losers were Textile Weaving, Refinery, and Tobacco, which declined by 10.3 percent, 1.6 percent and 1.4 percent respectively, said weekly report by Topline Securities.

Foreigners remained net sellers of $24.9 million during the week. Oil & Gas Exploration, Cement and Textile sectors saw major net selling of $9.7 million, $4.6 million and $2.7 million, respectively while buying was seen in Oil & Gas Marketing of $3.5 million.

Equity analysts predict that the current momentum was most likely to continue into early next week with benchmark index attempting to gain more grounds.