Profit-taking limits stocks’ advance KARACHI: Sporadic profit-taking during the shortened three-session week kept the benchmark KSE-100 index gains confined to 264 points, or 0.64 per cent. However, the index managed to close at a new all-time high of 41,464 points.
The trajectory of the index remained highly erratic amid drastic highs and lows. Volatility in international markets mid-week prompted selling pressure at the Pakistan Stock Exchange, but the moods brightened up as valuations became attractive, giving impetus to fresh buying towards the end.
Average daily volumes for the outgoing week declined 33pc to 404 million shares over the earlier week while average daily value fell 19pc to Rs14 billion, as trading during the week was shortened to three sessions due to Muharram holidays.
Top slots in volume ranking continued to be occupied by second-tier scrips, including Bank of Punjab (132m shares), TRG Pakistan (50m), Aisha Steel Mills Ltd (49m), Japan Power Generation Ltd (33m) and Bank Alfalah (32m).
With worries on their minds over the imminent rate hike by the US Federal Reserve, foreign investors returned to buy with inflows amounting to $2.24m against an outflow of $8.34m the previous week.
During the week, banks and electricity sectors saw net foreign buying of $3.3m and $3.2m, respectively, while cement and exploration and production (E&P) sectors saw net selling of $2.9m and $2.5m.
Investor interest remained centred on autos, banks and oil and gas exploration companies. Banks remained top performers in anticipation of better results for the third quarter. Bank Alfalah, Bank Al Habib and MCB Bank added 69 points to the index.
Trailing on its tail was the E&P sector as oil prices stayed firm given prepositions of a production cut made by Russia and Saudi Arabia to support higher oil prices. The Oil and Gas Development Company and Pakistan Oilfields contributed 48 points to the index. Among oil marketing companies, Hascol Petroleum’s share rose 7.8pc during the week.
The automobile sector rallied 3pc, with Indus Motors, Pak Suzuki and Atlas Honda Cars being major gainers as sector re-ratings set in due to new car launches.
Textiles turned strong, while profit-taking was witnessed in fertilisers, telecom and cements.
Leading gainers during the week were Hascol Petroleum 7.83pc, Askari Bank 6.93pc, Shell Pakistan 6.12pc, Bank Alfalah 5.69pc and Amreli Steels Ltd 4.7pc.
In contrast, Lotte Chemical Pakistan fell 7.32pc, Engro Polymer 3.81pc, Fatima Fertiliser 2.41pc, PTCL 1.75pc and Dawood Hercules Corporation 1.58pc.
Major news flow during the week included International Monetary Fund’s call for devaluation of the rupee against the US dollar to keep exports competitive; interest shown by Chinese investors to put money in troubled businesses with negotiations already under way with some banks and a cement company; new deadline set by the government for privatisation of Pakistan International Airlines and Pakistan Steel Mills; 9.3pc drop in workers’ remittances in September; decline in auto sales during the month.
Chinese offer to help Pakistan rehabilitate and expand its railway system starting with 1,700-kilometre Karachi-Peshawar track at a cost of $8bn; and China Petroleum Pipeline Bureau’s consent to construct liquefied natural gas terminal at Gwadar on and engineering, procurement and construction (EPC) basis envisaging a 700km pipeline from Gwadar to Nawabshah.
OUTLOOK: Volumes could remain skewed towards second and third0tier stocks in the week ahead. In the absence of triggers, the market might draw strength from improving micros, multiple re-rating and possible increase in foreign activity as the KSE-100 index draws closer to its inclusion in MSCI Emerging Markets Index in summer of the next year.