KARACHI: The stocks market’s momentum slightly fizzled out in the outgoing week as profit-taking limited gains to 172 points, or 0.35 per cent. However, the benchmark KSE-100 is still at its all-time high of 49,211 points.

Average daily volume increased 20pc to 489 million shares while average daily value traded rose 7pc to Rs23 billion during the week, signalling investors shifting position to top-tier scrips from second- and third-tier shares.

Volume leaders included K-Electric (106.3m shares), TRG Pakistan (103.6m), Engro Fertilisers (94.8m) and Azgard Nine (94.1m).

Foreign selling remained the key feature of the ongoing week with a heavy sell-off of $46.5m worth shares against $2m the earlier week. Major outflow of $14.2m was witnessed in the chemicals sector, followed by cement $13.1m, power and distribution $5.8m, and commercial banks $2.6m. The foreign selling was absorbed by mutual funds to the extent of $20.5m, individuals $16.8m and companies $13.5m.

According to major brokerage houses, the drivers of the index during the week were power and distribution sector which contributed 149 points, followed by pharmaceuticals 74 points and commercial banks 46 points.

Rally in the power sector was primarily driven by the Hub Power Company which announced it would exercise its option to raise its stake in the China Power Hub Generation Company from 26pc to 47.5pc.

MCB Bank contributed 106 points to the index gains during the week on expectations of higher value after incorporation of NIB Bank.

On the flip side, the exploration and production sector eroded 142 points off the index as international crude oil prices fell to $50.8 a barrel before recovering to $52.7 later on. Textile and fertiliser sectors were also down 2.1pc and 1.2pc, respectively.

Major news that drove the investor sentiment included withdrawal of subsidy on fertiliser products. The decision was reversed later on, but the sector had already caused a loss of 63 points to the index. The government also announced long-awaited exports package worth Rs180bn during the week.

Other major news included: World Bank revised Pakistan’s growth rate upwards to 52pc for 2016-17; in July December, car sales stood at 97,532 units, remittances slipped 2.4pc to $9.46m and trade deficit widened by 22pc year-on-year; and foreign exchange reserves increased to $23.2bn.

According to AKD Securities, leaders at the bourse were: Amreli Steels which gained 20.4pc, Engro Polymer 9.6pc, Sui Northern Gas Pipelines 6.9pc and Kot Addu Power Company 5.8pc. By contrast, Pakistan Petroleum lost 6.2pc, Engro Fertilisers 4.9pc, Nishat Mills Ltd 3.2pc and Adamjee Insurance 2.68pc.

OUTLOOK: Market pundits visualised the bourse performance going forward from “sideways” based on judges’ remarks in the Panama papers case hearing tagged with resistance before touching 50,000-point mark, to “continuation of the index on upward trajectory” based on attractive valuations and growth prospects in various sectors.

A reversal in foreign selling was banked upon to assist the market cross the crucial 50,000 resistance. Yet, most analysts agreed that market sentiments would be dictated mainly by the international oil price movement and upcoming corporate announcements as the results seasons is about to commence.

Published in Dawn, January 15th, 2017