Equities remain shaky

Karachi stock exchange during the last week closed on a bearish note as political uncertainty weighed heavily on the minds of investors. The benchmark KSE-100 index lost 463 points to close at 28,918 points during the last week ended on August 15, 2014 compared to 29,381 points a week earlier.
Progressively rising political tensions translated into by far the highest ever single day decline of 1,310 points or 4.5 per cent at the bourse as the week opened on Monday.
Having said, the market showed resilience and recovered most of the losses to close only 1.6 per cent lower WoW to 28,918 points. The week was shortened to four trading days by a politically eventful Independence Day holiday.
Amid uncertain political scenario, foreigners understandably remained shaky, with Foreign Portfolio Investment clocking in negative US $0.2 million, compared to healthy US $21.6 million inflow a week earlier.
Although, on the last trading day-Friday the market witnessed some recovery supported by institutional buying in blue chips, however overall market posted a bearish trend as retail investors remained cautious over prevailing political crises and adopted wait and see policy.
Despite of a negative tread, an average daily volume was surged by 30.3 per cent to 168.62 million shares during the week compared to 129.43 million in previous week and this was mainly due to selling pressure on the back of uncertainty on the PTI and PAT marches.
During the week under review, the market capitalisation posted a notable decline of 1.7 per cent or Rs120.52 billion to Rs 6.786 trillion as against Rs 6.907 trillion a week earlier. Daily average value surged to Rs 8.11 billion, up by 27.1 per cent or 1.73 billion.
"The week opened on a bearish note and the benchmark KSE-100 Index falling sharply by 4.5 per cent on Monday," said Furqan Ayub, an analyst at JS.
Although investors' qualm about political environment in the country remains unresolved, however, by midweek investor sentiment witnessed some improvement on optimism linked to the resolution of the current crises, he added.
Meanwhile, corporate result season also stirred the market activity and consequently, the KSE-100 Index plunged by only 463 points or -1.6 per cent Week on Week basis this week to close at 28,918 level, Ayub said.
Average volumes traded on the other hand increased by 30 per cent WoW to 169 million shares, he said.
During the week, the POL, NRL, ARL, ATRL and MCB were the key corporate companies, which announced their results.
The release of cement, auto sales and remittance data were some major news of the week. Cement sales down by 14 per cent to 2.23 million tons in July 2014, Auto sales also disappointed in July 2014 and clocked in at just 6,948 units, declining by 34% YoY and 42% MoM. In addition, overseas Pakistanis remitted $1.65 billion in the first month of the current fiscal year, this is 25 per cent YoY higher than monthly average of $1.32 billion in FY14.
Analysts at KASB said that politics emerged as a major market mover this week, with the PTI/PAT increasingly hardening their tones against the elected government of the PML-N, demanding nothing less than resignation of the Prime Minister.
Both the parties started their long marches have reached capital and was demanding the resignation of Prime Minister.
On the other hand, robust profitability growth reported across the board, in the final/half yearly result announcements, managed to lead the recovery from Monday's sizeable correction.
Banks (MCB), Oil & Gas (POL) and Fertilizer (EFERT) sector results were largely in line and managed double digit bottom line uptick. Despite, MCB, POL and EFERT closed 3.1 per cent, 1.9 per cent and 5.3 per cent WoW respectively.
OMC results disappointed, where APL (2.0%WoW) and SHEL (3.6% WoW) reported below line result on heavy inventory losses.
Mari Petroleum (+1.7% WoW) rejuvenated on reports of favourable changes to gas pricing formula and distribution of accumulated cash reserves to shareholders.
Talking about the market outlook, analysts said that "We believe political developments over the weekend will set the tone for the index next week, where contradictory reports of (1) violence on the way to Islamabad, and (2) a negotiated deal between the protesting parties, the army, other political stakeholders and the govt are already doing the rounds."