THE KASB REVIEW

STOCK MARKET AT A GLANCE

 

 

By SHABBIR H. KAZMI
Updated Nov 16, 2002

 

MARKET REVIEW: POLITICAL UNCERTAINTY FLOWING DOWN TO THE MARKET

Political uncertainty led the index into restless waters, where it traded with in the range of 2188 - 2297 

 

during the week. After a whole week of vague political picture, issues are likely to resolve to a certain extent in the first session of the National Assembly. This may bring some clarity in the vision of investors for their investment strategies; however, PSO related development may also raise negative sentiments. Due to this we expect, negative sentiments to over shadow positive outlook in the near term, which may lead the Index to drop 50-100 points in the coming week. We advise investors to remain cautious and to focus on defensive stocks having high dividend yields.

MARKET THIS WEEK

With a choppy price behavior, the KSE-100 Index remained within the range of 2188 - 2297 during the week and closed at 2271.6, up by 1.99% from last week's 2227 level. The average daily volumes declined to 138.82mn shares as compared to previous week's 230.45mn, showing decline of investors' interest during the week. Hubco, PTCL, PSO and FFCJ remained under the limelight and witnessed a change of 2.67%, 2.11%, -0.26%, 6.21% and 5.13% respectively.

With the tremendous quarterly financial performance, National Bank outperformed the market and gained 6.2% during the week to close at PkR26.50 on Friday. Hubco remained intact on its growth trend having the largest cumulative trading volumes of 124mn shares and gained 2.7% during the week to close at PkR26.90. FFCJ and PTCL also gained 5% and 2% respectively. PSO's share price was mainly driven by speculation on privatization throughout the week and the share traded within the range of PkR192-196 and closed at PkR192.70 on Friday.

OUTLOOK FOR THE FOLLOWING WEEK

We are not very optimistic about the market trend in the near term, based on the political uncertainty. However, things will become clearer in the first session of National Assembly but uncertainty over formation of the government and delays in privatization process of PSO will disappoint investors, which can lead the Index in to a correction mode. We advice investors to remain cautious and enter only in defensive stocks having high dividend yields where we prefer Hubco, Fauji and consumer stocks, i.e., Lever, Packages and Nestle, which always outperform in the falling market.

DAILY DRAMA

The beginning of the week was quite disappointing, as the Index dropped almost 35 points during first few hours on Monday due to high badla volumes. However, rumors on announcement of pre-bid meeting for PSO cushioned the falling market and Index recovered to close 15 points down at 2212. This continued on Tuesday where the PC announced pre-bid meeting date for PSO to resolve the problems of the interested parties. This led the Index to gain 11.89 points where it closed at 2223.

Political issues started taking up their shape from Wednesday where the optimism regarding PML(Q) joining hands with MMA led the Index for a smart gain of 42 points as the Index closed at 2265 level with high volumes of 153mn.

Market opened on a highly positive note on Thursday where news on political side and privatization of PSO led the Index to almost 2300 levels. However, punters off loaded their positions and profit taking was witnessed due to which the market failed to breach the golden level and fell to close slightly above previous day's closing, at 2270.

On Friday market remained relatively dull as the investors adopted a cautious strategy after a long eventful week. The trading volumes shrunk to 115mn shares and the Index gained marginally by 1.64 points to close at 2272.

MARKET ROUNDUP

..

LAST WEEK

THIS WEEK

% CHANGE

Mkt. Cap (US $ bn)

8.64

8.81

1.97

Total Turnover (mn shares)

1152.25

694.11

-39.76

Value Traded (US$ mn.)

848.98

519.55

-38.80

No. of Trading Sessions

5

5

 

Avg. Dly T/O (mn. Shares)

230.45

138.82

-39.76

Avg. Dly T/O (US$ mn)

169.80

103.91

-38.80

KSE 100 Index

2227.34

2271.60

1.99

KSE All Shares Index

1390.27

1419.25

2.08

Source: KSE, MSCI, KASB