Equities stay positive

Driven by the regional bourses, Karachi stocks settled in the positive territory last week with KSE-100 index rising 0.3 percent WoW to 33,954.98 points. The trading turnover grew three percent and averaged on 181 million shares valuing down by 10 percent at Rs8.6 billion or $82.3 million.
Most of the activity remained concentrated in the low market cap second- and third-tier scrips, said equity analysts.
Foreign portfolio investors remained jittery as their net selling WoW accumulated to $9 million.
According to Topline analysts, local mutual funds and banks were major net buyers of $9.1 million and $4.2 million, respectively, while the foreigners sold net equities worth $9.2m. This takes the year-to-date (YTD) net selling of foreigners to $205 million. The real estate, industrial transportation, tobacco and financial services were major gainers and rose by 8.5, 7.2, 4.4 and 4.3 percent respectively. While the healthcare, travel and cement stocks declined by 7.4, 3.3 and 2.3 percent, respectively.
Commenting on the reasons for the index's positive close, analysts said political certainty and a positive trend in regional markets drove sentiments at KSE.
"Certainty was seen on political front as the ruling party again won the election of NA-122," said analyst Abdul Azeem.
Faizan Ahmed of JS Research attributed the positive trend to political tensions having somewhat been cooled down and "leftover SECP investigation concerns subsided". Nonetheless, the analyst said, sector specific concerns continued to hinder broad based rally and the tug of war between the bulls and bears continued throughout the week with major opportunistic trading activity in index heavyweights such as oil and gas, banks, cements and fertilisers.
Topline analysts cited as a trigger the rally in regional markets with Chinese stocks extending their rally to eight-week high.
Moreover, they said, major developments on economic side also supported the bourse. Oil scrips performed well on the back of surge in international oil prices. "However, at the end of the week, below than expected results of E&P companies and drop in oil prices hurt companies' share prices growth," they viewed.
Other highlights of the week were: 15 percent YoY decline to $5.5 billion in 1QFY16 trade deficit, four percent YoY up-tick in foreign remittances, T-bills auction with relatively unchanged cut-off yields and Lucky Cement's announcement of intention to install a Greenfield cement plant in Punjab.