Pakistan stock market saw a positive week as Karachi stock exchange-100 index rose by 1007 points.The strong recovery of the cement sector and positivity in the international markets were two most important reasons for the positive sentiment in the Pakistan stock market.
The news of the increase in the October trade deficit has gave a wrong message to the foreign investors. It has showed an increase of 4.6 % as compared to October 2015.This figure shows that government has failed to control the downfall of the economy.
Domestic investors showed special interest in financially sound industries like Cement and Banking.Foreign investors remained negative about the stock market.They offloaded net equities of $ 28 million during the week.
The Karachi stock exchange-100 index started the week at 41840 points and ended the week at 42847 points.The weekly trading volume showed an increase of 2% as compared to the last week.The current week share trading volume was 2468.4 million shares as compared to the last week’s volume of 2420 million shares.
Best Performing Sectors
Cement sector and commercial banking sector were two best performing sectors at the Pakistan stock market. Commercial banking sector contributed 325 points to the Karachi stock exchange-100 index. HBL and UBL were two important players of this sector. UBL and HBL grew by 3.9 and 4.7 % respectively during the week.Overall banking sector showed growth of 3 % during the week.
Cement sector showed growth of 6 % during the week. DGKC and MLCF are two best performing stocks of this sector.These both companies added 117.1 points to the Karachi stock exchange-100 index.
Sector to Watch
Cement was the best performing sector of the last week.Most of the stock market experts agree that it has very good long term prospects. The launching of first cargo shipment from Gwadar has kick started the much hyped CPEC project.This news again has brought Cement sector in the limelight. It is expected that cement sector demand will increase by 1.5- 3 million tons on annual basis after the completion of CPEC.
CPEC will increase the construction activity and the demand of cement in the country.Chinese companies have also showed interest to invest in the cement sector for CPEC – related construction projects.After analyzing all these factors it can be concluded that cement sector is a very good investment option for the short run and long run.
Market analysts are expecting a mixed sentiment in the upcoming week.Domestic Political environment and international oil prices will play an important role in upcoming trading week.
All the eyes are on the supreme court of Pakistan.It is hearing the Panama case involving the family of the Prime minister of Pakistan.Lawyers of Sharif family will submit their detailed answer on 15 November 2016.Any verdict against the Prime minister can create uncertainty in the stock market.
International oil prices can further decrease in the upcoming week.Currently ,world crude oil production is at its highest level.According to the figures released by OPEC,crude oil production increased by 240,000 barrels per day (bpd) in the month of October 2016.This news will decrease oil demand and will put further pressure on already low oil prices.