KSE-100 Index records Rs940b earnings in 2021

KSE-100 Index records Rs940b earnings in 2021

KSE-100 Index records Rs940b earnings in 2021
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KARACHI: The earnings of the benchmark KSE-100 Index displayed a jump of 19.9 per cent on a year-on-year basis in December 2021 and 0.6 per cent on a quarter-on-quarter basis.

The earnings growth was led by the highest weighted commercial banks sector amid interest rate hike and reversal in general provisioning made last year in lieu of Covid-19, whereas cyclicals (cements and autos) also witnessed a massive growth in profitability given the improved prices.

The energy sector (oil and gas marketing companies, and the exploration and production) also posted a bottom-line jump led by higher oil prices.

However, the power generation sector displayed a dip in the profitability in the wake of lower share of profit from the associate of Hub Power Company Limited (Hubco) and lower capacity payment of Kot Addu Power Company (Kapco). While the engineering sector also showed a decline in the earnings led by a slowdown in the demand.

Moreover, the earnings during 2021 augmented 47 per cent to an all-time high of Rs940 billion on a year-on-year basis, while the earnings of the index also improved 59 per cent on a year-on-year basis, compared with the pre-Covid period of 2019.

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During the second quarter of the fiscal year 2022, the major contributors to the profitability included the oil and gas marketing companies whose bottom-line went up 385 per cent to Rs24.4 billion on a year-on-year basis; textile composite, Rs12.9 billion, up 128 per cent on a year-on-year basis; textile spinning, jumped 98 per cent on a year-on-year basis to Rs1.3 billion; glass and ceramics, Rs1.9 billion, up 56 per cent on a year-on-year basis; oil and gas exploration, Rs63.1 billion, witnessing a growth of 54 per cent on a year-on-year basis, pharmaceuticals Rs4.7 billion, up 44 per cent; and commercial banks profitability rose 44 per cent to Rs62.6 billion on a year-on-year basis.

In comparison, the earnings of other heavyweight sectors such as power generation contracted 56 per cent to Rs8.5 billion, fertiliser 27 per cent to Rs17.1 billion and engineering contracted 54 per cent to Rs3.8 billion.

On a sequential basis, the earnings of the KSE-100 Index posted a growth of 0.6 per cent on a quarter-on-quarter basis, led by banks with an increase of 7 per cent attributable to rate hikes, oil and gas marketing companies 70 per cent led by inventory gains, chemicals, 12 per cent amid improved chemical margins, pharmaceuticals, 65 per cent, and the refinery sector rose 1,537 per cent, amid inventory gains.

The fertiliser and engineering sectors posted a decline in the earnings of 11 per cent and 43 per cent on a quarter-on-quarter basis, respectively.

The growth of 47 per cent in the earnings during 2021 was fuelled by all the heavyweight sectors, including commercial banks, which posted profits of Rs233.1 billion, fertiliser generating earnings of Rs77.3 billion, oil and gas exploration sector registering profits of Rs225.4 billion, technology and cement displaying a cumulative bottom-line of Rs52.4 billion.

On the flipside, only two sectors showed a decline in their earnings; power generation down 23 per cent and transport down 62 per cent in 2021.

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During 2021, the sectors leading the growth in the profitability including textile spinning, up 8,311 per cent; textile composite 285 per cent; cement, 251 per cent; engineering, 154 per cent; automobile assemblers, 114 per cent; chemicals, 106 per cent; and glass and ceramics showing a growth of 71 per cent.

On a sequential basis, during the fourth quarter of 2021, the KSE-100 Index posted a negative return of 304 points, down 0.7 per cent, where technology sector remained the worst performer eroding 469 points from the index due to a decline in TRG; followed by the oil and gas marketing companies, which shed 132 points; refinery, 116 points; food and personal care, 108 points; and textile composite shed 104 points.

The KSE-100 Index generated a return of 1.9 per cent, or 841 points, in 2021 where the technology sector posted the highest contribution by adding 1,003 points; followed by commercial banks, which added 921 points; fertiliser 467 points; miscellaneous, 273 points; power, 131 points; automobile assemblers, 67 points; and chemicals 57 points.

However, the cement sector eroded 373 points from the index; followed by the oil marketing companies (OMCs), which eroded 347 points and refinery remained the third, as it eroded 337 points from the index.

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