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PSX on the road of supremacy

Pakistan entered into a new era of equity trading from time to time development in its stock exchange, which is getting succession, ideally.

Pakistan Stock Exchange (PSX) has been ranked 5th best-performing stock exchange with 43.05 percent gain last year and there are reports that PSX has topped Bloomberg’s best performing equity index 2016 in Asian markets.

Despite the unrest in Brazil, Brazil Stock Exchange topped the list with a gain of 63.36 percent. Kazakhstan, Peru and Russia stock markets were second, third and fourth respectively. Nigeria’s ratings were worst with-41.40 percent. It is also said that Karachi 100 Index has been ranked 5th in World’s Equity Indices. From local currency point of view, Pakistan’s stock exchange was in 6th position with 45.25 percent rise last year.

It is a vital step towards demutualization of the shares market in the country after the merger of three exchanges – Karachi, Lahore and Islamabad into one name Pakistan Stock Exchange and soon after taking positive development when Pakistan Index reclassified to the Emerging Market status in June last year.

Presently, PSX sold 40 percent strategic share to a Chinese consortium that made the highest bid of Rs28 per share for 320 million shares on offer. The value of the transaction is calculated to be Rs8.96 billion ($85 million). The important feature of the contract lies in the fact that it is the first such sale of strategic interest in a bourse in the regional markets. Through the deal, the Chinese bourse has also made its first foray in an acquisition outside China.

KSE-100 LEADERS & LAGGERS

The top 10 contributors to the KSE-100 index comprised of banking, E&P, cement and pharmaceutical firms. Habib Bank Limited (PSX: HBL) emerged as the leading contributor in 2016 with an addition of 930 points to the index following the re-rating of banks in the MSCI Emerging Markets Index. It was followed by Lucky Cement (PSX: LUCK), which contributed 878 points following high demand and raised capacity utilization amidst increased infrastructure development.

The E&P and refinery sector performed well in the face of recovering gross refining margins also inventory gains realized because of the bullish trend in oil rates during 2016. This resulted in OGDC (Oil and Gas Development Company), Pakistan Oilfields Limited (PSX: POL) and Pakistan Petroleum Limited (PSX: PPL) in recording an impressive contribution to the index.

On the other hand, laggers for the index belonged mostly to the fertilizer, textile and energy sectors with Fauji Fertilizer Company and Engro Fertilizers Limited (PSX: EFERT) dragging the index down the most in 2016.

The fertilizer sector recorded fall in off-take and overall structural problems that led to lower margins during the year. Similarly, energy generation companies like Kot Addu Power Company (PSX: KAPCO), Pakgen Power Limited (PSX: PKGP) and Lalpir Power Limited (PSX: LPL) had lower margins because of fuel mix and plant inefficiencies.

TOP PERFORMING STOCKS

The best performing stock in the KSE-100 index was International Steels (PSX: ISL). It was a dream year for the firm as expansion came online; global rates turned into their favor; anti-dumping case came out optimistic for them; capacity utilization went to optimum level; while the firm was able to sustain historic margins.

The second best performing stock was Sui Northern Gas Pipeline (PSX: SNGP). Financiers favored this utility company as UFG fell and its asset base explained growth upon which the firm was guaranteed return from the government. Institutions, particularly mutual funds took liking to this stock.

The prospects for SNGP look bright in this year 2017 as well. Honda Atlas Cars (PSX: HCAR) outperformed in the auto industry after the firm introduced the new civic that saw its monthly sales double last year as against to 2015.

Oil Marketing Companies (OMCs) and refinery sector stocks also did impressively. Gross refining margins enhanced last year, while the OMC sector recorded volumetric growth that benefited firms like Hascol Petroleum (PSX: HASCOL) and Shell Pakistan (PSX: SHEL).

Searle Pakistan (PSX: SEARL) was the pharmaceutical story of the year as the company continued its double-digit growth.

KSE 100 INDEX FULL MARKET CAPITALIZATION
Date
Open
Full Cap
Change %
Change points
Market Cap
2-Aug-16
39,786.93
0.00%
6,577,330,625,479
31-Aug-16
39,892.23
39,877.68
-0.04%
-14.55
6,604,049,628,640
1-Sep-16
39,877.68
39,807.06
-0.18%
-70.62
6,592,354,496,612
30-Sep-16
39,903.93
40,194.82
0.73%
290.89
6,715,230,502,857
3-Oct-16
40,194.82
40,644.84
1.12%
450.02
7,000,425,151,214
31-Oct-16
39,645.81
39,597.87
-0.12%
-47.94
6,784,592,914,557
1-Nov-16
39,597.87
40,922.61
3.35%
1324.74
7,011,569,260,023
30-Nov-16
42,537.42
42,404.97
-0.31%
-132.45
7,238,226,372,639
1-Dec-16
42,404.97
42,792.58
0.91%
387.61
7,293,000,237,692
30-Dec-16
47,661.60
47,947.48
0.60%
285.88
8,153,935,464,942
2-Jan-17
47,947.48
48,405.01
0.95%
457.53
8,231,743,708,212
25-Jan-17
49,445.81
49,226.57
-0.44%
-219.24
8,365,804,318,205

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