KARACHI: The declining trend on the Pakistan stock market slowed down during the outgoing week with the KSE-100 index losing 526 points (1.1 per cent) to close at 46,332 points. It declined by 5.4pc in the preceding week.

Equities were hammered in the first two sessions in the outgoing week as domestic politics took centre stage, while declining oil prices also added pressure.

Almost all major index heavyweights such as Oil & Gas Exploration, OMCs, fertilisers and cements continued to extend losses. According to Arif Habib Ltd the losers during the week were commercial banks (94 points); oil and gas exploration companies (90 points); automobile assemblers (68 points); pharmaceuticals (56 points); power generation and distribution (62 points) and textile composite (42 points).

Foreign investors remained on a buying spree during the week, scooping up stocks valued at $9.2 million as against net sale of $9.5m the previous week. Foreign buying was concentrated in banks ($3.2m), fertiliser ($3.0m) and food ($1.2m), while they sold $2.2m of power stocks.

Among local participants individuals were major sellers of $24.78m worth stocks during the outgoing week, followed by mutual funds that sold-off shares of $9.19m. Major buyers were banks of $10.59m.

Average daily volumes were up 8.3pc over the previous week at 277m shares against the average daily traded volume of 317m shares while traded value rose 21pc to $124m against average traded value of $156m. Volume leaders were: KEL 124m shares, TRG 59m shares, BOP 43.3m shares and EPCL 38.5m shares.

Major laggards during the week included HBL down 85 points; Searle 46 points; PPL 46 points and FFC 44 points. The positive contributors were Hubco, up 68 points; UBL 45 points and NML 41 points.

Top performers during the week, according to AKD Securities were NML up 7.96pc, HUBC 3.86pc, AKBL 3.74pc and EPCL 3.01pc, whereas leading decliners were: INDU down 6.80pc, FFBL 6.07pc, LOTCHEM 5.77pc and HASCOl 5.17pc.

News flow included National Fertiliser Development Center announcing Pakistan’s May’17 urea sales increase to 521,000 tons. FBR imposition of 60pc regulatory duty on vehicle imports: Regulatory duty on more than 500 items enhanced, including electronics, milk products, kitchen items, cars, fruits and vegetables. Release of FDI numbers rose 22pc year-on-year (YoY) in 11 months fiscal year 2017 to $2bn, textile export numbers down 12pc YoY in May ‘17 and release of LSM numbers were up 5.6pc YoY in 10 months fiscal year 2017.

Surge in net foreign direct investment was up by 22.6pc YoY to $2.03bn during the 11 months fiscal year 2017, with China taking the top slot investing $878m (vs. $657m in 11 months fiscal year 2016); decline in textile and clothing exports by 1.98pc YoY to $11.23bn for 11 months fiscal year 2017 and NEPRA approval of Rs1.90 per unit reduction in power tariff for the Ex-WAPDA distribution companies (Discos) for May’17 under monthly fuel adjustment formula.

OUTLOOK: Market pundits predict that the trading is likely to remain depressed during the post-Eid holidays sessions in the rollover week. Going forward, earnings season for the period ending June 30, would likely to grab attention with investors aligning portfolios to expectations on earnings and payouts.

The index was currently trading cheaper at the price-to-earnings ratio of 9.4 times compared to Asia Pacific regional average of 13.2 times while offering dividend yield of 5.2pc against 2.5pc offered by the region.

Published in Dawn, June 25th, 2017