Weekly Review: Stocks show mild recovery after Brexit blues
KARACHI—The turmoil in global market in the aftermath of Brexit decision kept the local bourse fairly subdued in the week ended on July 1 with the market only gaining 1.1 per cent, or 394 points, week-onweek amid thin volumes. The week started with Brexit blues dragging the market down by more than 400 points in intra-day trading as aftershocks of the referendum on Britain’s exit from the European Union appeared and retail investors traded cautiously. By mid-week, the bourse bounced back as regional markets switched to a recovery mode and investors got clarity on the limited impact of Brexit on Pakistan’s economy.
However, the trading week ended on a dull note on Thursday. The market remained closed on Friday on account of Jummatul Wida. Global crude markets also staged a comeback during the week, touching $50 per barrel (Brent), stimulating the oil and gas sector to outperform the benchmark KSE 100-share index by 0.2 per cent. Among specific stocks, K-Electric remained in the limelight during the week on rumours of its potential acquisition. Other key sector was banks and financial institutions that kept the market in the green, absorbing the selling from local institutions. Blue-chip stocks led the gains with Lucky Cement, United Bank Limited, Dawood Hercules and Hubco Power cumulatively contributing 204 points, while Fauji Meat was the major drag on the index contributing -254 points with a cumulative volume of 3,000 shares. Meanwhile, the Pakistan Stock Exchange replaced four companies in the KSE Meezan Index (KMI-30) with an equal number of constituents as part of re-composition of one of the two indices of Shariah-compliant stocks.
The market sentiment received a significant boost as the IMF review concluded successfully, indicating the ruling party’s continued focus on fiscal consolidation and structural reforms. Additionally, the approval of $600 million ADB loan for structural reforms supported investor sentiment. Foreign institutional portfolio investment (FIPI) recorded an outflow of $3.6 million during the week as opposed to outflow of $20.5 million last week.
Average volumes traded fell 8.1 per cent weekon-week and the value of shares traded dropped 13.6 per cent week-on-week. Bata Pakistan Limited manufactures and sells rubber, leather, and microlon sandals and shoes. Abbott Laboratories (Pakistan) Limited manufactures, imports, and markets research based pharmaceutical, nutritional, diagnostic, hospital, and consumer products. The company’s key products include antibiotics for respiratory tract infections, peptic ulcer disease, and dental infections. Pakistan Tobacco Company Limited manufactures and sells cigarettes. Feroze 1888 Mills Ltd manufactures and sells a wide range of cotton towels and fabrics. Rafhan Maize Products Company Ltd produces corn oil, industrial starches, liquid glucose, dextrin, gluten meals, and other corn related products. The company also produces a wide range of co-products such as gluten feeds, meals, and hydrol. Jubilee General Insurance Company Limited is an insurance provider. The group supplies a number of lines of coverage, including health, fire, marine and miscellaneous.—Agencies