The Karachi Stock Exchange has shown once again an impressive performance during the calendar year 2014 as the benchmark KSE-100 index gained 26.5%, ended at 31,954 after touching 32,315 level. The bull run witnessed due to foreign buying, lower inflation figure, PKR appreciation, divesting of government shareholding in; PPL, HBL, UBL, and ABL. Moody’s positive outlook on Pakistan’s foreign currency government bond rating to stable from negative coupled with revision in the outlook of five top Pakistani banks to stable from negative also boost investors sentiments. Furthermore, operation Zarb-e-Azb re-rate KSE multiple during the year.

Foreigners net buying worth $386 million
As mentioned above that heavy buying by the offshore investors was one of the key factors that triggered bullish activities in the market. As per the data released by the National Clearing Company of Pakistan Limited (NCCPL), foreign investors did a net buying worth $386 million in CY14 as compared to a net buying of $398 million in CY13 mainly due to local capital markets were trading at a significant discount from regional capital markets.

Auto & Pharma top performer; Cements followed
Automobile sector stood as the top performing sector in CY14 with an appreciation of 138% mainly due to Depreciation of Yen against Pak Rupee and US$ and better volumes on account of launching of new model by Indus and introduction of Taxi scheme. Honda Atlas posted return of 396%, followed by 187% and Pak Suzuki by 151%. Similarly, Pharma sector also perform well due to expectation of favorable drug policy and increase in drugs rate due to higher return from Ferozsons by 252%, Searle (95%) and Abbott (79.3%).  Pharma was followed by Cement sector which gave return of 63%, thus beating KSE 100 index return of 26.5% by wide margin of 36.5%. Pioneer Cement emerged star performer in the sector, giving return of 143% during CY14, followed by Lafarge Pakistan (105%), Kohat Cement (94%), Fecto Cement (84%) and Fauji Cement (75%).

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Azee Research