KARACHI: The KSE-100 index gained 1,895 points (3.73 per cent) over the outgoing week to close at an all-time high of 52,636 points.

Investors continued to be enchanted by the stocks that have qualified for inclusion in the MSCI Emerging Market Index, effective June 1.

As a result, OGDC rose 9.4pc, ENGRO 7.4pc, HUBC 6.6pc, PPL 7.3pc and HBL 3pc together contributing 720 points to the index’s steep climb. “In terms of absolute return, the two MSCI EM small cap surprises THAL & ISL gained almost 15pc during the outgoing week,” pointed out analysts at Topline Securities.

The first three sessions of a bullish rally were cut short by the profit taking in the remaining two sessions as investors were spooked by the federal budget, which was set to be announced at the end of the week. “Moreover decline in oil prices by 5pc following the OPEC meeting where lower than expected oil output cut was approved for the next nine months also dented the sentiments at the bourse,” said BMA Capital Market report.

Investor participation, nonetheless, improved with average volumes for the week increasing 34.6pc over the earlier week, to 355.1 million shares.

Foreigner investors were net buyers of stocks worth $6.5m during the week, which was a refreshing change from the foreigners’ persistent sell-off including the earlier week’s net sale of $16.4m.

In the outgoing week, foreign interest centered on banking, oil and gas sectors, which attracted major buying of $9.9m and $7.1m. While the cement sector witnessed overseas investors’ selling worth $8.0m followed by combined selling in all other sectors in sum of $3.9m. Among local participants, Mutual Funds were the biggest buyers of $53.7m worth shares in the outgoing week.

On the sector front; engineering outperformed the index with its capitalisation expanding 7.7pc over the earlier week as NTC determined that China had been dumping re-bars in Pakistan at half the price.

E&P’s stocks also beat the market and gained 7.5pc. Among other sectors, fertilisers, Independent Power Plants (IPPs) and banks broadly tracked the index gaining between 2.8pc to 4.0pc. Autos, textiles, pharmaceuticals, food and cement underperformed the benchmark index, securing gains between 0.7pc and 2.1pc. Transport and sugar sectors conceded around 2.4pc each.

On the macro front, the State Bank of Pakistan released the Monetary Policy Statement at the weekend, where it kept the policy rate unchanged at 5.75pc.

Outlook: The budgetary measures announced on Friday would drive the market sentiments in the upcoming week. Investors are also likely to accumulate stocks that have qualified for the small-cap MSCI Emerging Market upgrade.

Published in Dawn, May 28th, 2017