KSE fell 396 points last week amidst global sell-off

Observer Report

Islamabad

The stock market lost ground in the outgoing week as the KSE-100 index fell 396 points or 0.9% to settle at 42,447, largely taking cue from weakening international markets and in the wake of some unimpressive corporate results as well as balance of payments challenges.
The week, which ended on August 17, saw a flurry of financial result announcements including from renowned names like Engro Corporation, National Refinery, Attock Refinery, Pakistan Oilfields, Attock Cement and Pak Elektron, which impacted the interest of investors in the market.
On the global front, emerging markets across the board, including Pakistan, suffered from the fallout of escalating tensions between the US and Turkey over the latter’s refusal to release a detained US pastor.
This prompted the US to impose heavy tariffs on Turkish imports, triggering a similar response from Ankara.
However, positive developments in the domestic political arena, such as oath-taking by newly elected parliamentary members and the election of Imran Khan as Pakistan’s new premier, left a positve impact on investor sentiments in the last trading session on Friday.
Earlier, the bourse remained in the red in first three trading sessions of the week with the benchmark KSE-100 index shedding 881 points. Despite some political clarity, investors were sceptical amid not-so-excited corporate results and concerns over the country’s balance of payments situation.
Sentiments were further dented as Turkey’s financial woes rattled global financial markets following the slump in its lira currency.
Market participation during the week dropped as average daily volumes stood at 161 million shares, down 23%, while average daily value fell 18% to $64.3 million.
Sector-wise negative contribution came from fertiliser (-88 points), commercial banks (-86 points), cement (-56 points), power generation and distribution (-36 points) and automobile assemblers (-31 points). Among individual stocks, the index was driven down by Habib Bank (-142 points) and Engro (-55 points) following weak financial results. They were followed by Dawood Hercules (-54 points) and Sui Northern Gas Pipelines (-36 points).
On the flip side, Bank AL Habib and Pakistan State Oil contributed 39 points and 27 points respectively to the index.
During the week, foreigners continued to offload their stockholdings and sold a net $6.55 million worth of shares compared to net selling of $38.6 million in the previous week, led by corporate selling that amounted to $8.36 million.
Selling was witnessed in commercial banks ($5.9 million) and cement stocks ($2 million).
On the domestic front, major buying was made by individuals ($5.9 million) and insurance companies ($5.5 million). Mutual funds were net sellers of $6.2 million.
Among major highlights of the week were Asia-Pacific Group asking Pakistan to make terror financing and money laundering extraditable offences, spending of $7.5 billion on external debt servicing, Pakistan’s trade deficit standing at $3.19 billion in July, power sector receivables soaring to Rs896.36 billion and a 47% surge in circular debt.
WINNERS OF THE WEEK
Ibrahim Fibres: Ibrahim Fibres Limited, a part of the Ibrahim Group, operates a polyester staple fibre manufacturing plant. The company manufactures a wide range of polyester staple fibre and it also manufactures a variety of blended as well as pure synthetic yarns. Ibrahim Fibres Ltd also owns an in-house power generation plant.
Attock Petroleum: Attock Petroleum Ltd retails petroleum products. The company operates gasoline filling stations in Pakistan and Afghanistan.
LOSERS OF THE WEEK
Pakistan International Container Terminal: Pakistan International Container Terminal operates a container shipping facility in Karachi, Pakistan.
Pak Elektron: Pak Electron Limited manufactures and sells a variety of electrical products and domestic appliances. The group’s power products include transformers, energy meters and switchgears. Their appliances consist of a range of deep freezers and air conditioners. The group also has an agreement with Sony Pakistan (Pvt) Ltd, for which Pak Electron will manufacture Sony brand televisions.

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