The Karachi Stock
Exchange remained bullish throughout the month of
September as strong performance of the banking and
petroleum sectors precluded any fresh fallout owing to
negative news related to the index heavy weight,
Pakistan Telecommunication Ltd. (PTCL). The month saw
the breach of 8,000 points level by the KSE-100 index
after a time lag of over 5 months, backed by a
consistent upward price trend witnessed in almost all
the major stocks. The recovery of the market was rather
broad based with the second and third tier stocks
joining the bandwagon among the lead of the banking
sector, in which renewed buying interest fueled both the
prices and volumes. The index finally finished at the
highest closing level of the month of 8,225.66 points on
September 30, 2005, reflecting a surge of 428.80 points
or 5.50% from its August-end level of 7,796.86 points.
With the strengthening of investors' confidence, trading
activity also improved substantially in the market and
the average daily turnover during the month increased by
57.77% from last month to 353m shares.
The key factor that enabled the
market to revive from the passive and dull period
witnessed after the mid-March crisis was the successful
implementation of Continuous Funding System (CFS) Scheme
that added needed liquidity and depth in the market.
This boosted the investors' confidence as well and as a
result the knowledgeable investors took positions in the
fundamentally strong banking sector having high growth
potential. National Bank of Pakistan (NBP), Bank of
Punjab (BoP) and MCB Bank (MCB) were the top picks in
the sector while in the energy sector Pakistan Oilfields
Ltd. (POL) was the star performer of the month. The
cement sector also posted strong results under the lead
of D. G. Khan Cement (DGKC). Heavy buying in these
stocks also enabled the market to withstand negative
rumors regarding the finalization of the privatization
process of PTCL. The strength of the current bullish
trend can also be seen from the negligible response
exhibited in the market on the omission of final
dividend payout by the telecom giant following its
unimpressive yearly results. The ability of the KSE-100
index to comfortably breach and sustain above the 8,000
points level reflects on the fundamental strength of the
leading base shares as well as the current bullish
outlook among investors.
An overall broader market recovery
was witnessed across all sectors during the month as
depicted by the News-Prime Bank (NPB) Composite index,
which rose by 4.64% and crossed 7,000 points level to
close at 7,302.5 points compared to 6,978.97 points as
on August 31, 2005. The two components of the NPB
composite index i.e. Financial and Industrial, also saw
similar growth trends with the NPB Financial index
rising by 5.57% from last month's level to close at
4,265.02 points and the NPB Industrials index recording
a price appreciation of 4.45% to close at 8,620.51
points.
Among the 36 sector indices included
in the NPB composite index, apart from just 8 sectors,
all the other sectors closed on a positive note at the
end of September compared to the price levels at the end
of the previous month. The highest percentage jumps in
prices during the month, ranging between 30-35%, were
seen in the sectors of 'Vanaspati and Allied' and
'Automotive Assemblers', while 'Brokerage firms', on the
other hand, experienced a price fall of 4.8% during the
month.
In the NPB Financial indices, as
mentioned before, 'Banks and Investment companies' were
the top performing sector with a rise of 11.3% in its
index followed by the sectors of 'Insurance' and 'Modarabas'
rising around 7.1% and 7.0% respectively. Similarly in
NPB Industrial sector indices, the winning sector apart
from 'Vanaspati and Allied' and 'Automotive Assemblers'
was 'Cement and Building Products' while on the other
hand share prices in 'Jute' sector was the biggest
casuality, declining by 4.4% during the month.
News-Prime Bank Indices
Major Index Closing as on Percentage
Sept. 30, 2005 Change
Composite 7,302.50 4.6% Financial
4,265.02 5.6% Industrial 8,620.51 4.4% Base: 10,000
December 29, 1994
Top 5 Winning Sector Indices
Sector Index Closing as on Change
over
Sept. 30, 2005 August 31, 2005
Vanaspati & Allied 810.1 32.9%
Automotive Assemblers 2,440.1 30.5% Cement &
Building Products 351.9 21.1% Electronic &
Electrical Goods 382.3 15.1% Engineering & Metals
1,150.5 13.5%
Base: 1,000 December 29, 1994
Top 5 Losing Sector Indices
Sector Index Closing as on Change
over
Sept. 30, 2005 August 31, 2005
Brokerage Firms 418.7 -4.8% Jute
1,051.5 -4.4% Food and confectioneries 1,666.5 -2.5%
Textile Spinning 1,046.4 -1.9% Polyester yarn and
fabrics 439.4 -1.7%
Base: 1,000 December 29, 1994
