Prior to the elections, most of the traders were fairly
bullish as no major upsets were expected in the elections. However, the results
were contrary to all expectations. The religious parties won a sizable number of
seats and the so-called 'king's party' did not perform as expected. The result:
Panic settled in.
Other developments during the week were I) commencement of
the undisclosed trading system which is expected to lead to greater transparency
in the stock market; II) National Bank of Pakistan's second public offer of 5%
ordinary shares with a green shoe option of an additional 5%; and III) the
approval of PkR 8bn grant for KESC.
THIS WEEK'S PERFORMANCE
Throughout the week the market remained extremely bullish
with regards to the general elections and the much anticipated post election
rally. Consequently the KSE100 Index ('Index') rose from 2028 points at the end
of the previous week to breach the 2100-point barrier on Wednesday. At this
point in time, the general sentiment in the market was extremely upbeat with
many analyst saying that if the elections go off smoothly, reaching 2300 points
would not be that unachievable.
However, the results of the general elections were totally
unexpected with the religious parties coming to the forefront. Consequently the
sentiment throughout the last day of trading was extremely bearish. The Index
declined considerably to end the weeks trading at 2037 points, reflecting a
marginal increase of 0.44% over the last week.
Volumes throughout the week remained fairly high, with the
average daily volume being 120mn shares as compared to 152mn shares during the
previous week.
OUTLOOK FOR THE COMING WEEK
According to our expectations, the bearish sentiment
reflected during the last day of trading is likely to continue in the coming
week. We believe that the market is likely to remain considerably turbulent
throughout the month until a new government sets in and takes control.
THE DAILY DRAMA
On Monday the new system of undisclosed trading commenced,
and the market reacted favorably to the new system. It was generally believed
that the new system would result in greater transparency in trading. The market
was fairly bullish throughout the day and institutional support resulted in the
Index rising by 19 points to close at 2047 points. Volumes averaged at 132mn
shares with Hubco and PTCL topping the list.
Historically, there has often been an upward rally in the
market post elections. The market expecting such a rally early next week
remained bullish, with institutional buyers along with some foreign investors
buying heavily. Consequently, the Index rose further on Tuesday by 20 points to
close at 2067 points. Higher investor interest also resulted in the volumes
increasing by 21% to 160mn shares. All key stocks reflected considerable gains
especially those in the oil and gas and fertilizer sectors.
On the third day of trading, the market continued to be
extremely bullish on the forthcoming elections and breached the psychological
barrier of 2100 points, reaching a three-year high. However, profit selling at
these levels resulted in clipped gains and the Index closed on Wednesday at 2099
points. Volumes increased further to 179mn shares with Hubco, PTCL and Engro
topping the list.
The stock markets remained closed on Thursday on account of
general elections.
On Friday, the market opened on an extremely bearish note.
Contrary to the expectations, the so-called 'king's party' did not win a sizable
number of seats in the elections. Instead, religious parties seemed to be on the
forefront and as a consequence, panic settled into the market. The market took a
62 points dive to close at 2037 points. Volumes declined by 22% to 139mn shares.
MARKET ROUNDUP |
| .. |
LAST WEEK |
THIS WEEK |
% CHANGE |
|
Mkt. Cap (US $ bn) |
7.87 |
7.89 |
0.25 |
|
Total Turnover (mn shares) |
600.29 |
610.43 |
0.42 |
|
Value Traded (US$ mn.) |
648.03 |
398.88 |
-38.45 |
|
No. of Trading Sessions |
5 |
4 |
|
|
Avg. Dly T/O (mn. Shares) |
120.06 |
152.61 |
27.11 |
|
Avg. Dly T/O (US$ mn) |
129.61 |
99.72 |
-23.06 |
|
KSE 100 Index |
2028.39 |
2036.98 |
0.42 |
|
KSE All Shares Index |
1264.51 |
1270.04 |
0.43 |
