Upward trajectory continues

Karachi stocks index closed the week with 34,262 points, showing 0.9 percent increase week-on-week (WoW). During the results announcement session, the benchmark KSE-100 traded sideways in the first two trading sessions but then started rallying in the last three sessions on the back of what analysts said better-than-expected quarter results posted by scrips from cement, pharmaceutical, banking and fertiliser sectors.
"The KSE continued its upward trajectory during the week... with companies by and large posting healthy profits," said Faizan Ahmed of JS Research. Topline analysts said the investors were jubilant this week. The daily trading volumes averaged on 165 million shares, up two percent over preceding week while value of stocks traded rose 13 percent to Rs 9.3 billion or $88 million.
Ahmed said most of the activity remained concentrated in cements, banking, pharmaceuticals and fertiliser stocks.
"The market performance was mainly driven by local institutions (mutual funds, banks etc) as selling frenzy by foreign investors continued during the week," the analyst said.
Topline researchers recorded foreigners' net selling at $20.1 million. This, they said, took the net selling of offshore investors for the month to $48.2 million.
Major buyers of the week included local mutual funds, NBFC's and companies with buying of $13.9 million, $5.6 million and $5.1 million, respectively.
Sector-wise, real estate investment, automobile and parts, tobacco, forestry and beverages added 11.3, 7.3, 6.6, 5.8 and 4.5 percent, respectively, while the media, electronic and electrical goods, and food producers shed 7.4, 4.2 and 3 percent.
Analysts said that trading in the cement sector remained "volatile" after Lucky Cement revealed its plan to develop a $200 million Greenfield cement plant in Punjab. The cements overall underperformed the KSE-100 index by 0.5 percent despite strong quarterly results.
Important highlights of the week were: conclusion of successful US visit by Prime Minister Nawaz Sharif, massive earthquake shaking Pakistan, continued devaluation of Pak Rupee, imposition of 6.41-14.92 percent anti-dumping duty on Chinese PSF and 15 basis points cut in cut-off yields in the recent T-bills auction.