A bullish trend persisted on the Karachi share market during the outgoing week ended November 8 and the benchmark KSE-100 index closed at its highest-ever level. The index increased by 142 points on week-on-week basis and closed at the level of 16,243 points.
Trading activity, however, remained low as average daily volumes at ready counter declined by 3 percent on week-on-week basis to 146 million shares.
Local investors opted for profit-taking during the week. However, foreign investors' interest continued and they remained net buyers of shares worth $14.9 million.
It was four-day week as the market remained closed on Friday on account of the Iqbal Day.
The market opened on a positive note on Monday and the index increased by 55 points to close at 16,156 points. On Tuesday, investors opted for profit-taking and the index dropped into the negative zone to close at 16,051, down 105 points.
Investors' interest revived on Wednesday and fresh buying in various sectors supported the index to increase by 167 points, closing at 16,218 points. This trend continued and the index gained another 25 points on Thursday to close at the highest-ever level of 16,243 points.
"The local bourse continued with its positive momentum and the KSE-100 Index closed the week at an all time high level of 16,243, up 0.9 percent on week-on-week basis with average daily volumes declining to 146 million shares, down 3 percent", Naveed Tehsin an analyst at JS Global Capital said.
He said that the weekly gains were trimmed by a mid-week market correction as investors were unnerved by a statement made by Chief of Army staff, stating that various institutions were overstepping their roles and impacting the credibility of the armed forces. Highlights of the week included cement sales figures released for October showed decline of 5.9 percent to 2.8 million tons led by weak exports, government plans regarding gas allocation to fertiliser plants, and cotton arrivals up 2.2 percent in FY13YTD and cotton crop estimates by different stakeholders.
The cement off-take in October 2012 stood at 2.8 million tons against 2.9 million tons recorded in the same period last year, down 5.9 percent. The same is primarily attributable to weak exports of 680,000 tons, down 20.5 percent. Domestic sales were up marginally by 0.2 percent year-on-year and 16.3 percent on month-on-month basis in October due to post monsoon seasonal effect. Resultantly, the construction and material sector underperformed the market by 2.3 percent on week-on-week basis.
The government reportedly shelved the plan to import 300,000 tons of urea and was said to be formulating ways to supply gas to the SNGPL-based plants. The sub-committee of the ECC had a meeting last week to discuss the long term gas allocation plan to the fertiliser plants, where the short-term gas allocation plan also came under discussion. This reflected in the positive performance of ENGRO, which outperformed the market by 3.9 percent on week-on-week basis.
According to latest data issued by Pakistan Cotton Ginners Association (PCGA), cotton arrivals up to October 31 this year, have clocked in at 6.85 million bales, 2.19 percent higher than arrivals in the same period last year. All Pakistan Textile Mills Association's (APTMA) Chairman predicted a record FY13 cotton crop of 15 million bales. According to the Cotton Crop Assessment Committee (CCAC) 12.7 million bales are expected this season against initial estimates of 14.6 million bales.
"Our FY13E outlook stands 2 percent lower YoY at 14.53 million bales," he said. The Textile sector underperformed the broader market by 0.8 percent on week-on-week basis.
An analyst at AKD Securities said that the average daily volumes were down by 3.01 percent to 145.86 million shares, however volumes were still better than the FY13TD average of 130 million shares. Key news flows driving market sentiment included ECC approving 75mmcfd of gas supply to the fertiliser plants on the SNGP grid during this winter season, Lahore High Court extending the hearing on ICH to November 14'12, delay in EU Autonomous Trade Preferences (ATP) package and media hype over the confrontation between army and judiciary. Top performers during the week included EFOODS (+9.7 percent, on rumours of potential share acquisition by Saudi food giant Almarai), BAFL (+5.6 percent, on expectation of reduction in saving rate floor) and NBP (+5.25 percent, year-end rally on dividend expectation). The laggards list was headed by ULEVER (-4.9 percent), NML (-2.3 percent, delay in EU ATP package) and PTC (-2.0 percent, sustainability concerns over ICH). The volume leaders during the week included FCCL (47.81 million shares), EFOODS (42.83 million shares) and DGKC (38.03 million shares).