KARACHI: The Pakistan stock market staged a stunning rally in the outgoing week with the KSE-100 index recording handsome gains of 1,078 points (2.36 per cent).

The week saw the index storm past the 46,000-level and settle at 46,638 points. The positive contribution to the benchmark index in the outgoing week took the 2018 to-date gains to 15.2pc, wiping out all of the earlier loss endured during the FY18 to-date.

There were ample triggers to fuel the rally, starting with the central bank’s decision to hold back the expected hike in a policy rate the week earlier, providing relief to certain heavily leveraged sectors. The market also rejoiced on Friday as the wait for amnesty scheme was over. Announcement of $3.285 billion to be lent by International Trade Finance Corporation was icing on the cake.

Market participants largely brushed away concerns raised by the parliamentary committee over the recent delimitation exercise which could potentially lead to a delay in elections and the fears over the US-China trade war.

Banking sector bore the brunt of blow from the State Bank’s decision to maintain status quo on the policy rate, but the banks garnered investors’ interest in the later part of the week, anticipating material inflows through official channels after the announcement of amnesty policy. Unchanged policy rate also provided benefit to the cement and steel sectors, with the latter inviting investors’ attention on reports of further price rise while possible removal of regulatory duties on steel hurt the engineering scrips.

Sector-wise positive contributions came from cement, at 195 points, followed by commercial banks 194 points amid euphoria over the amnesty scheme, oil and gas exploration companies 169 points given downwards sticky oil prices and advent of new discoveries. Other gaining sectors included fertiliser with 100 points and oil marketing companies 96 points.

Foreign investors carried on their buying spree in the outgoing week with net inflows of $3.62 million compared to net buying of $1.9m worth of stocks the preceding week. Buying was witnessed in exploration and production at $7.1m and commercial banks $2.68m. On the domestic front, major selling was reported by banks valuing at $15.9m and insurance companies $8.6m. The sell-off was absorbed largely by mutual funds which made massive buying of $45.3m.

The average traded volume went up by 8.19pc over the preceding week to 259.37m shares, led by Engro Polymer and Chemicals, at 84.85m shares, Lotte Chemical 77.26m shares, Fauji Cement (FCCL) 63.68m shares, K-Electric (KEL) 61.02m shares and Nimir Resins 43.44m shares. The average traded value clocked in at $114m, up 33.7pc over the week before.

Point-wise, major contributors to the index upsurge were Pakistan Oilfields (POL), at 128 points, Habib Bank 104 points, Lucky Cement 71 points, Engro Corporation 54 points and Hub Power 53 points.

Outperformers according to the AKD universe included Maple Leaf Cement, growing by 11.62pc week-on-week, POL 8.73pc, FCCL 6.72pc, Indus Motors 5.95pc and Attock Petroleum 5.58pc while Fatima Fertiliser, shrinking by 1.83pc, KEL 1.43pc, Amreli Steels 0.33pc and Kot Addu Power 0.11pc were the laggards.

News highlights during the week included: SBP decision to maintain policy rate at 6pc; annual consumer price inflation clocking in at 3.2pc year-on-year in March; foreign reserves declining by $152m over the week to stand at $17.796bn on Mar 30.

Published in Dawn, April 8th, 2018