The share market last week registered unprecedented gains for the second consecutive week as buying spree by local and foreign investors boosted the market sentiment where oil and gas scrips led the bourses.
On week-on-week basis, KSE-100 Index gain 509 points, or 4.6 percent, settling at 11,460 level. Market capitalisation was recorded at Rs 3.2 trillion or $54 billion--an increase of Rs 130 million, or 4.2 percent, over previous week. Average daily volume in ready market increased to 420 million shares (Rs 60 billion, or $1,005 million) versus 315 million shares (Rs 38 billion, or $639 million) of previous week.
The market, after witnessing heavy outflows, saw a reversal in the foreign portfolio investment. Once again, the heavyweight E&P sector (with 35 percent share in Index) was in the spotlight and mainly responsible for the overall Index rise.
After posting a declining trend, foreign portfolio investment picked up during the week with net inflows coming into Pakistan's equity market. As per data released by SBP, $28.8 million was sucked from the market by foreign investors during the preceding week, a net inflow of $10.8 million coming in the first three days of the week.
An analyst from Jahangir Siddiqui Capital Markets said that by virtue of its heavy dominance in the Index, E&P sector, for another week, was mainly responsible for the overall increase in the Index. "As per our calculation, out of 509 points rise in Index this week, E&P companies (OGDC, POL & PPL) cumulatively added around 355 points, or 70 percent.
This is because of the fact that these three stocks occupy major share of 35 percent in the Index." Rumours regarding upward revision in OGDC reserves and discovery in Nashpa, Kohat kept OGDC in the limelight and its share price gained Rs 18, or 13 percent.
On Friday, POL announced successful testing of its development well, Pindori-6 in Pindori. As per the notice issued by KSE, the well was tested for 2,455 bpd of oil and 8.89 mmcfd of gas. The well was spudded on September 16, 2004. POL, the operator, holds 35 percent stake while OGDC has 50 percent share in Pindori D&P lease.
Pindori field is currently producing around 9,400 bpd of oil and 28 mmcfd of gas. "As per our working, the additional oil and gas production on the basis of tested production rate at Pandori-6 will result in incremental EPS of Rs3.9 for POL and Rs0.17 for OGDC."
The week started off with some positive news regarding dumping duty reduction on bedlinen by EU to 5.8 percent, and imposition of dumping duty on import of polyester filament yarn, along with NBP result announcement, pushing the stock to its upper circuit on the first trading day of the week. However, oil stocks were the outperformers, which contributed about 60 percent of total upside in the week.
Monday started on an extremely bullish note and the buying behaviour of investors led the index to its intra-day high of 11259 points. However, towards the end of the session, heavy profit taking in blue chips plunged the index to its intra-day low of 10907 points. Other than NBP, banking scrips like MCB, BoP, Union Bank, Faysal Bank and Bank Alfalah increased by 4.8 percent, 3.2 percent, 4.6 percent, 2.2 percent and 3.8 percent, respectively.
High volatility on the back of profit taking prevailed in the exploration scrips. OGDC, PPL and POL closing respectively lower 4.1 percent, 6.2 percent and 6.1 percent from their respective intra-day highs.
Bulls continued to dominate for the second day as KSE-100 index gained another 97 points to close at the 11130 points. The market started on a positive note and the index made 11223 points intra-day high. From that point onwards, investors opted for profit taking, thereby restricting the gains of the day. OGDC was the star performer of the day.
The index giant increased by 3.9 percent to Rs 150.80 with healthy volumes at 113 million shares and contributed 99 points to total index surge. POL posted increase at 1.2 percent to close at Rs 589.95. However, PPL closed with a marginal loss at Rs 251.00. On the other hand, SSGC and SNGPL depicted increase of 4.9 percent and 2.6 percent to close at Rs 36.15 and Rs 110.00, respectively.
The rally continued on the third day unabatedly as the index, for the fifth consecutive day, gained another 149 points, to close at the 11278 points level.
Exploration and cement sectors emerged triumphant while the banking sector got some battering due to profit taking. The index giant OGDC posted increase of 2.8 percent to close at Rs 154.95, while PPL and POL increased by 1.9 percent and 1.2 percent. Buying spree was also witnessed in the telecom giant, PTCL, as the scrip rose 3.2 percent to Rs 64.90.
Cements attracted investors due to the rise in ex-factory cement prices. D.G. Khan Cement, Lucky Cement, Fauji Cement and Maple Leaf Cement increased by 0.9 percent, 2.1 percent, 2.8 percent and 1.0 percent, respectively.
Friday was the day for oil as OGDC and PPL managed to close on upper circuits while POL closed at Rs 621 gaining Rs 24 (up 4.02 percent), all three contributing 183 points to the index upside, while other stocks in the red zone pushed the index aggregately up 181 points. Several news loomed in regarding discoveries at Pindori field along with gas price revision by Ogra for E&P companies.
OGDC gained Rs 7.70 to close at Rs 162.65 (up 5.0 percent) on the volume of 111.4 million shares, while PPL closed at Rs 268.50, gaining Rs 12.75 (up 5.0 percent). Banking sector remained in lacklustre condition as NBP, MCB, BOP all lost Rs 4.0, Rs 2.95, and Re 0.65, respectively, to close at Rs 276.50, 215.05 and 89.80.
The trading volumes were 373.73 million shares, down 9 percent compared to previous day, while trading value improved to Rs 62,050.47 million, up 9.8 percent, on daily basis.
An analyst from Alfalah Securities said that the news regarding gas price revision by Ogra for local E&P companies could continue the bull rally. "But OGDC is trading nearly to our fair value of Rs 163; hence, we see a limited upside. We, therefore, recommend to stay bullish on cement and banking stocks for the coming week."
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