Political noise keeps stocks subdued in last week

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Observer Report

Karachi

It was a bleak week for investors as the benchmark index trended downward, shedding 815 points (-1.7%) to close at 48,166. It was only during Friday afternoon that the index saw a swift reversal as completion of roll-over lifted sentiments. This may likely spill over to the next week barring any further jitters.
Additionally, mid-week news regarding recommendations pertaining to leverage product being approved by the regulator somewhat contained the downward slide. Nevertheless, renewed market expectations with media reports suggesting the Panama case verdict is likely to be announced next week kept investors participation limited, refraining them from taking active bets.
Major drags on the index were Habib Bank Limited (-5.1% week-on-week), Lucky Cement (-5.1%), Engro Corp (-3.8%), Bank of Punjab (-20.9%) & Pakistan State Oil (-3.3%), with negative contribution of 439 points.
Top contributors were Mari Petroleum (+14.9%), Pakistan Tobacco (+13.9%), EFU General Insurance (+6.4%), Millat Tractors Limited (+4%) & Philip Morris (+14.8%), adding 200 points to the gain.
On the sector front, tobacco (+14% week-on-week) was the top performer, as demand for big tobacco stocks outpaced limited supply, while bank’s market capitalisation declined 2% as the market took BOP’s right issue announcement negatively.
Oil & Gas exploration sector ended in the green as well on 4.6% week-on-week higher crude oil prices and notice pertaining to acquisition of 20% working interest in Bannu West by Mari petroleum (up 14.9% week-on-week).
Cement sector underwent price deterioration (down 2.6% week-on-week), pulled down by the news of K-P government issuing 14 licences to companies to set up cement factories in the province.
During 1QCY16, the KSE-100 returned 0.7%, however, market capitalisation declined 0.4%. Average volume/value surged 154%/132% partially due to low base effect of last year, as volumes were thin due to low oil prices and a global equities sell-off.
Foreigners turned major sellers during the week, selling $19 million worth of shares compared to net selling of $3.5 million in the previous week.
WINNERS OF THE WEEK
Philip Morris Pak Ltd: Philip Morris Pakistan Limited manufactures and sells tobacco and cigarettes. Mari Petroleum: Mari Petroleum specialises in the drilling, production and sell of natural gas. Pakistan Tobacco Company: Pakistan Tobacco Company Limited manufactures and sells cigarettes.
LOSERS OF THE WEEK
The Bank of Punjab: The Bank of Punjab (Pakistan) operates under the status of a scheduled bank in Pakistan. The bank provides commercial banking services.
Soneri Bank: Soneri Bank Limited provides banking services. Askari Commercial Bank: Askari Commercial Bank Limited provides commercial banking services. The bank has branches in Pakistan, Azad Jammu and Kashmir and Bahrain.