KARACHI – With regards to the blue chip sectors at KSE, a major decline was witnessed in the oil and gas sector which showing a decline of 12.6 percent, while OGDC was a major contributor in declining of the sector, declined by 21 percent during the first quarter of 2011, while the market remained volatile and closed with a decline of 1.8 percent in quarterly terms amid net foreign selling and uncertainty on political front.
However, the food and chemicals sectors supported the market, showing an appreciation of 25 percent and 24 percent respectively and outperformed the index by heavy margin. Based on samples, the top ten scrips posted a better risk adjusted return during the period inder review and outperformed the KSE-100 index by a significant margin, said Mazhar A Sabir at Investcapital, adding that FFC, Engro and Pace turned out to be the most prominent performers in terms of returns as well as in the case of risk adjusted return basis and producing returns of 47 percent, 36 percent and 31 percent, respectively.
Regarding the risk return profile, NCL and FFC remained on top, posting better returns while being low risk with Sharpe ratios of 5.5x and 1.6x respectively. Rather poor performers included the technology, financial sector, and oil and gas sectors which declined by 37 percent, 17 percent and 13 percent, respectively during 1QCY11, he added.
Given the improved macroeconomic scenario, the SBP has maintained the discount rate at current level of 14 percent, while acknowledging fears over the soaring rate of inflation in the near future. With forthcoming corporate results and the budget, the market will remain in narrow range and may show a lackluster performance in near future, he added.
