Since commencement of 2012: Top-10 most-influencing stocks contribute 1,257 points to index

The top-10 most-influencing stocks contributed 1,257 points to the KSE-100 index in its total gains of 1,897 point since the commencement of the year 2012, translating into 66 percent contribution to the current market rally while the rest was shared by the remaining 90 scrips constituting the benchmark, analysts said.
On the contrary, volumes contribution from the very set of stocks has been only 15 percent by far, with NBP and FFC being on top, while 85 percent of the market activity at the bourse has been generated through either second or third-tier stocks, they added.
"The simplest way to define inflation is 'too much money chasing too few goods' and this could be a relevant phenomenon here at the Pakistani stock market these days, or the case may have been in the past too, with equities retesting new highs before it seemed to have taken a rest a day earlier", Khurram Schehzad, head of research at InvestCap said.
It seems as if equities have been blessed with lifeblood since the notorious capital gains tax-related issues were eventually given a heed with promises from the relevant authorities for new CGT regime's implementation from April 2012 onwards, he said. However, looking closely through the broader trends reveals that there still has been a concentrated activity (in terms of volumes) towards the lower-tier scrips compared to a wide-board rally that should have been the case, he added.
"Conversely, index's big boys have so far played their conventional role to only muster up more points and that, interestingly, at a nominal or average volume bargains", he said. In this regard, index-heavy stocks from only few sectors ie Oil and Gas, FMCG, Fertiliser and Banks, were prominent who have added the most to the KSE-100 index during January 2012 to date where the market has so far yielded a solid 17 percent gains year-to-date.
He said on Wednesday's market activity when KSE-100 was down primarily due to selling observed in the Oil and Gas sector with volumes in the same being at minuscule levels while the total market volumes easily crossed 300 million mark. This signifies increasingly high level of participation from the individuals or retail investors with institutional participation being average, he said. At the same time, this also alerts investors to look beyond the changes in the benchmark index for their investment decisions, he added.
Given current scenario, market rally is largely contingent to the timely materialisation of the acceptances made by the authorities with respect to the CGT regime. Thus, a long stretch from April 2001 may have serious consequences on both market volumes and returns, he said.