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KARACHI: Political uncertainty, submission of the JIT report and adjournment of Supreme Court decision to next week, resulted in adding to the pervading gloom over the investor sentiments. KSE-100 index declined 885 points (1.96 per cent) and settled at the end of the week at 44,337 points.

During the week, the market also saw one of the worst sessions since 2009 when the index tanked 4.7pc and also hit its calendar year to date low at 43,043 points.

According to Arif Habib Ltd, the downside was led by cements (176 points) due to unimpressive cement dispatch numbers for June, due to Ramazan and monsoon rains; power generation and distribution (89 points); fertilisers (86 points); automobile assemblers (84 points) as car sales slowed down in June and shorter working days in Ramadan; Oil & Gas Marketing Companies (OMCs, 76 points).

Analyst at Topline Securities Adnan Sami Sheikh calculated that on the sector front declines were seen in: auto parts (7.7pc), transport (6.3pc), auto assemblers (5.8pc) and food (3.6pc) underperformed the broader market, while OMCs (2.3pc), engineering (2pc), cement (1.8pc) and fertiliser (1.6pc) were in line; while Exploration & Production (E&P) and banks fared slightly better shedding at the most 1pc.

On scrip-wise basis, the biggest falls were noted in UBL (82 points), Hubco (77 points) DG Cement (86 points) Dawood Hercules (59 points) and Engro Corp (56 points.

AKD Securities noted major losers during the week were HCAR (12.64pc), PSMC (10.56pc), CHCC (9.36pc), ICI (7.08pc) and LOTCHEM (6.93pc). Gainers, meanwhile, were GWLC (4.43pc), EFERT (3.99pc), NBP (3.93pc) PPL (2.99pc) and FFC (2.47pc).

The volumes rose 5.2pc over the previous week to 175 million shares in wild intra-day moves. Traded value rose 3.5pc to Rs9.7 billion. Volume leaders during the week were: KEL (68.63m shares), TRG (55.32m shares), BOP (46.74m shares), EPCL (34.74m shares) and ASL (29.47m shares).

Foreign investors were net buyers of $0.99m worth of equity during the outgoing week against net sales of $5.83m the preceding week. Foreign buying was concentrated in banks ($4.0m) and E&P’s ($1.4m), while foreigners sold $3.4m of cement, $1.9m worth OMCs and $1.3m of power generation stocks.

Among domestic players, individuals remained major sellers of $9.96m while insurance companies were the largest domestic buyers of shares valued at $15.7m

Among major news Moody’s affirmed B3 rating as risks remain; trade deficit widened by 37pc to $32.5bn; according to the State Bank of Pakistan, the nation’s total liquid foreign exchange reserves amounted to $1.44bn on July 7, up $80m from a week ago; foreign workers’ remittances during fiscal year 2017 (FY17) fell 3.08pc year-on year (YoY) to $19.30bn; K-Electric unveils $1bn plan to add 900MW into the system; cement dispatches during FY17 rising to 3.71pc YoY to 40.315m tonnes and total domestic car sales during FY17 going up 2.55pc YoY to 185,781units.

Outlook: According to Arif Habib Ltd, the market is likely to remain choppy next week as the investor attention remains focused on Supreme Court verdict over the JIT findings. “In the short term the prevailing sentiments will supersede the market fundamentals.” AKD Securities wrote in its weekend report, “Investors are expected to remain in ‘tunnel-vision mode’, affixed on Monday’s hearing in the Supreme Court.” It added that volatility was expected with thin volume pushing on either side. Next support to the market was expected from June-end result season with investors aligning their portfolios to expectations on earnings and payouts. Elixir Securities also thought the market was expected to remain volatile till clarity emerged on the political front. The brokerage stated, “however, note that KSE-100 index has already corrected by 16pc since its all time high record on May 24th,” and added that once the dust settles, the market could again start focusing on fundamentals where the key theme over the next one month will emanate from the upcoming result season.

Published in Dawn, July 16th, 2017