KARACHI: The dull and drab 2015 finally came to a close on Thursday with the country’s stock market managing to eke out a pittance of 2.13 per cent in return for the investors.
The benchmark KSE-100 index recorded gain of 685.03 points and closed about flat at 32,816.31 points. Most of the pundits’ calculations went haywire who at the start of the year were in the race to predict the closing somewhere between 34,000 to 36,000 points.
After three consecutive years of highly rewarding performance, the equity market closed 2015 on a low note, offering investors nothing to cheer about.
“Lackluster performance was due to: foreign selling; unexpected drop in earnings expectations of oil and banks and record offerings and rights issue that increased share supply in the market,” said analysts at brokerage Topline Securities.
“In contrast to the equities, gains from government bonds and real estate were far higher in the outgoing year. Investors in 10-year PIB made 17pc while real estate provided returns of 4-20pc in 3 major cities during 9 months, according to a leading real estate portal,” investment analysts said.
But for all that, Pakistan market performance in 2015 was not as bad as those of some regional markets, such as Sri Lanka, and Bangladesh in Asian Frontier Markets while China remained top performer among Asian countries.
Oil and banks, which together hold 40pc weight in the benchmark KSE-100 index, were the major underperformers and due to their pull back market could barely claw up a step or two. Price only KSE-100 index was down 3.5pc ($ -7.6pc).
This was in sharp contrast to the above average returns of 49pc ($38pc) in 2012, 49pc ($38pc) in 2013 and 27pc ($33pc) in 2014.
Foreign portfolio flows were key determinants that impacted Pakistan equities in 2015, which saw outflow of around $320 million. This compares unfavorably to average annual net buying of close to $300m in previous 3 years (2012-2014). This does not include foreign investment in government’s secondary market offerings.
The market witnessed record equity offerings of Rs116 billion/$1.1bn during 2015, up 60pc YoY led by Habib Bank Ltd’s (HBL) secondary offering of Rs102.3bn/$1.0bn. Although, total Initial Public Offerings (IPOs) in 2015 declined to 6 versus 9 offerings in 2014, the offer size was huge and 5 out of 6 new issues were oversubscribed.
“Amongst top contributors to the index during the year were HUBCO, ENGRO, DAWH, TRG and SEARL while on the flipside, OGDCL, MCB, PPL, POL and UBL were principal laggards,” another market observer said.
Courtesy : DawnNews