KARACHI: The raging bulls remained firmly in control of the Pakistan Stock Exchange (PSX) in the outgoing week as the benchmark KSE-100 index skyrocketed 2,116 points (4.89 per cent) to close at 45,387.

The strong gains were underpinned by sturdy oil prices, exciting production and sales figures in the industrial sector and announcements of expansion and acquisitions.

Buying intensified on Friday as investor interest was sparked after the Supreme Court adjourned the Panamagate case hearing until January, when a new bench with a new chief Justice would hear the case from the beginning.

In only seven sessions this month, the market has witnessed gains of 2,765 points, slightly higher than 2,729 points during the entire month of November. Foreign selling during the week stood at $25 million compared to last week’s $34m.

Major foreign sell-off was seen in exploration and production (E&P) stocks ($9.7m); cements ($4.56m) and textile composite ($2.73m). Foreign outflow has now reached $229m this year.

Heavy foreign selling during the outgoing week was absorbed by local asset management companies, which recorded massive buying of $40m compared to $19m in the previous week. Local individuals also jumped the bandwagon, followed with net buying of $2m during the week.

While average volume fell 15.3pc to 392.8m shares during the week, average traded value rose by 23pc as heavyweight stocks grabbed the spotlight from second- and third-tier stocks.

The best performing sectors during the week included cements (which contributed 561 points to the index), banks (497 points) and E&Ps (327 points). The auto sector also rose 3.5pc over the earlier week.

According to AKD Securities, leading gainers during the week were: Lucky Cement which increased 16.66pc, ICI Pakistan 13.8pc, Pioneer Cement 13.1pc, Fauji Cement 12.81pc and Adamjee Insurance 12.52pc. By contrast, laggards included Amreli Steels which was down 7.02pc, Engro Polymer 4.9pc, Hascol Petroleum 2.26pc, Pak Suzuki 1.51pc and Lotte Chemical 1.2pc.

CORPORATE ACTIONS: Lucky Cement announced intention to enter the automobile industry under a partnership with Kia Motors along with due diligence of potential acquisition of Dewan Cement Ltd’s 1.3m-tonne North Plant in Khyber Pakhtunkhwa and to enhance capacity in Iraq plant to 1.742m tonnes from the current 0.871m tonnes.

Other announcements included Treet Corporation’s plans to invest in the pharma sector; ICI notice of intent to acquire certain non-core products of Wyeth along with its manufacturing facility; Nishat Energy saying it will develop a 660-megawatt coal-fired power plant under the China-Pakistan Economic Corridor; Shanghai Electric sharing a $9 billion investment plan following K-Electric’s acquisition; and board of directors’ approval of MCB Bank and NIB merger.

OUTLOOK: According to Arif Habib Securities, positive triggers for the upcoming week included: opening of bids for divestment of 40pc shares in the PSX on Dec 15, which could result in flow of significant liquidity in the market; postponement of the Panamagate hearing and expected release of automobile sales figures for November.

Analysts cautioned that due to sustained rally for the last two weeks, profit-taking might be witnessed in the near term. Analysts at AKD Securities thought that the oil stocks could remain in the limelight next week following a meeting between Opec and Non-Opec countries to decide on oil output cuts.

Moreover, the US Federal Open Market Committee is scheduled to announce monetary policy next week (Dec 13-14) with broader anticipations of a 25-basis point hike in Federal Funds Target Rate (FFTR), according to an AKD Securities report. It added that the Fed’s outlook for the FFTR trajectory in 2017 remains a risk event for global markets.

Published in Dawn, December 11th, 2016