You are here: Home » Business » Weekly Review: KSE-100 crosses 19,000 barrier ahead of elections

Weekly Review: KSE-100 crosses 19,000 barrier ahead of elections

Initial losses were covered by gains later in the week.

Initial losses were covered by gains later in the week.

The poor law and order situation across the country in the run-up to general elections was unable to prevent the stock market from reaching a new record high. Strong corporate earnings saw the benchmark KSE-100 index smash past the 19,000-point barrier to close at 19,226 points during the week ended May 3.

The index recorded only one session in the red, on the opening day of the week, and managed to climb in the remaining three, May 1 (Wednesday) being public holiday on account of labour day, to end the week with a net gain of 309 points (1.6%) and touched a level never witnessed before in its history.

The law and order situation in the country deteriorated during the week as attacks on political parties continued ahead of general elections on May 11. However, strong corporate earnings and surprisingly low inflation numbers helped to improve investor sentiment.

Lucky Cement, the largest cement manufacturer in the country, announced a 49% growth in year-on-year income for nine months of fiscal year 2013. The company reported earnings per share of Rs21.59, which were above market expectations.

MCB Bank, one of the largest banks in the country, announced EPS of Rs5.70 for the first quarter of 2013 and paid out a dividend of Rs3.50 per share for the period. This too was largely above expectations and provided a boost to the banking sector.

The recovery of the fertiliser sector came into the limelight with Fauji Fertilizer Bin Qasim reporting EPS of Rs0.53 for the first quarter of 2013, after posting a loss in the same period last year. According to the National Fertilizer Development Centre (NFDC), sales of DAP (the company’s main product) grew 83% in the first quarter of 2013.

The stock market was also aided by the Consumer Price Index (CPI) data released by the Pakistan Bureau of Statistics. CPI for April stood at 5.8%, allaying investor fears that the discount rate will be increased in the future due to rising inflation.

There was bad news for the telecom sector as the Competition Commission of Pakistan (CCP) gave a detailed ruling on the International Clearing House (ICH), in which it scrapped the controversial setup and imposed heavy penalties on the Long Distance International (LDI) operators in the country.

The CCP ruled that the LDI operators are liable to pay 7.5% of their annual turnover in penalties for setting up the ICH. Pakistan Telecommunication Company Limited, Worldcall Telecom and Telecard Limited will have to pay penalty of Rs8.3 billion, Rs534 million and Rs189 million as per the ruling. All telecom stocks took a severe beating during the week.

Average trading volumes dropped 15.9% to 159 million shares per day and average daily value also fell 15.5% to Rs4.90 billion. The market capitalisation of the KSE rose 2.2% to Rs4.75 trillion by the end of the week.

Share Button

Leave a Reply

Scroll To Top