Karachi Stock Exchange (KSE) has witnessed volatile week, ended on October 11, as the KSE-100 Index lost 310.57 points, closed at the lower level of 21,775.39 against 22,085.96, with falling volumes. Average daily volumes witnessed the same situation, dropped by 34 percent, stood at 98.52m shares in comparison of 149.34m shares. Market capitalization remained under pressure, stood at Rs5.195 trillion from Rs5.240 trillion and average daily value also followed same trend, low by 45.1 percent, stood at Rs3.30 billion versus Rs6.01 billion.
Commenting on market's performance, Farrah Marwat, Head of JS Global said that Benchmark KSE-100 Index rallied 0.5percent on the last trading day of an overall dismal week, resultantly closing the week down by 1.4percent (-310 points). Investor interest was thin with trading volumes at KSE dropping by 34percent WoW to a mere 98mn shares, she added.
The same was against the backdrop of (1) weak corporate earnings growth for the June 2013 quarter where JS Universe earnings declined by 17percent YoY and 18percent QoQ and risks to upcoming September 2013 corporate earnings (2) uncertainty on the State Bank of Pakistan's stance on interest rates in the November 2013 Monetary Policy Statement (MPS) where 10-year PIB yields are still dangerously high at 12.9-13.0percent vs. 2014E KSE earnings yield of 12.8percent (3) a worsening domestic law & order scenario and (4) global economic growth and stability concerns given the ongoing US government shutdown, she said.
With regards to key sector-level developments, she said banks (1.1percent vs. KSE-100 WoW) had a relatively stronger run after the recent blood-bath, given rumors that SBP is considering lowering/capping the Minimum Deposit Rate on Savings Accounts.
Likewise, Farrah added cement sector (0.7pertcent vs. KSE-100 WoW) also saw investor interest returning after strong September 2013 off-take numbers were reported. On the flipside, the power sector (-2.6percent vs. KSE-100 WoW) struggled to gain a foothold as concerns on Hubco's plant coupled with the government's decision to rescind power tariff hikes early in week (restored by weekend) ate into investor confidence.
She said M&A related activity was in the limelight last week with (1) continued news flow on the sale of Warid Telecom where China Mobile (Zong) has reportedly dropped out of the race (2) the government re-iterated plans to announce a comprehensive strategy for the privatization of 31 public sector entities (PSEs) and (3) Engro Corp revealed some details about its planned IPO of Engro Fertilizer Ltd (EFL).
The target IPO size is 105mn shares at a floor price of Rs20/share where ENGRO will divest up to 30mn shares of its holding in EFL, while EFL will issue 75mn new shares, Marwat added.
The universe top performers of the week were: Lafarge Pakistan Cement, Pakistan State Oil, United Bank, Habib Bank, Attock Petroleum, D. G. Khan Cement, National Bank of Pakistan, Allied Bank, Lucky Cement and Pak Suzuki Motor.
According to day-by-day details, last week kicked off with negative affects at KSE as it witnessed bearish trend. The KSE-100 Index lost 221.11 points, closed at the lower level of 21,864.85 in comparison of 22,085.96.
Led by baking sector, Karachi shares market witnessed a smart recovery session on Tuesday. The KSE-100 Index gained 215.62 points, restoring its previous level of 22,080.47 in comparison of 21,864.85 on a day earlier.
Bears gain defeated Bulls in this week at local bourse as market witnessed fall of three months low on Wednesday. The KSE-100 Index lost 423.25 points, closed at 21,657.22 in comparison of 22,080.47 on a day earlier.
The market witnessed volatile session on Thursday, ended on positive note with slight change. The KSE-100 Index recovered 17.76 points, closed at 21,674.98 in comparison of 21,657.22 on a day earlier.
And on Friday, the trading-week closed on positive note at local market as the KSE-100 Index recovered further 100.41 points, stood at the level of 21,775.39 in comparison of 21,674.98 on a day earlier.