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KARACHI: Trading remained range-bound at the stock market in the outgoing week with the investors moving their positions in concert with the news flow. The KSE-100 index added comparatively modest gains of 272 points (0.66 per cent) and settled at 41,661 points.

Early in the week, the index remained under pressure on investors reducing their positions due to lack of clarity regarding financial assistance from Saudi Arabia and China.

Ongoing talks with the International Monetary Fund also kept investors cautious. The negativity deepened as the market saw selling in major stocks ahead of the MSCI semi-annual review results announced on Nov 13.

The rating agency did downgrade United Bank and Lucky Cement, as was expected, from the main index to small cap index, however investors took heart and were encouraged as the market did not take a major hit by the revision and the oversold UBL and Lucky started to regain some of the lost values.

Further clarity on the economic front also emerged as Saudi envoy affirmed that the kingdom would release $3 billion (part of the $6bn package) approved for Pakistan. It was also clarified that the modalities of Chinese assistance were being worked out as experts were in contract to finalise details of the package, which provided a boost to investors’ confidence.

Commercial banks remained in the forefront of gainers, adding 193 points on expectations of rate hike by 100 basis points in the upcoming monetary policy. Cement contributed 94 points as investors scrambled to pick up attractively value scrips as a result of decline in international coal prices.

Other sectors that contributed to the index upsurge included chemicals, higher by 42 points, pharmaceuticals 35 points and oil and gas marketing companies 23 points. Exploration and production performed poorly in the outgoing week, chipping away 78 points, as international oil prices declined, technology and communication 32 points, and food and personal care 16 points.

During the week, foreigners were net sellers amounting to $24.1 million, marking the 28th consecutive week of sell-off. Foreign selling was witnessed in cement at $9.1m and commercial banks $8m. On the domestic front, major buying was reported by companies with $9.9m and mutual funds $4.7m.

Average daily volume declined 8.5pc and settled at 213m shares while average traded value was up 2.1pc to $72m.

Scrip-wise major gainers were Habib Bank, up 91 points, MCB 81 points, Lucky Cement 52 points, Colgate-Palmolive Pakistan 28 points and UBL 26 points.

In the upcoming week, investors would keep a close watch on the outcome of IMF talks that may reach conclusion. Some market participants expect the market to remain lacklustre with unfavourable economic conditions and the prospects of increase in policy rates by the State Bank of Pakistan. The prime minister’s visit to Malaysia may be taken positively by the market and provide a reason for some selective buying.

Published in Dawn, November 18th, 2018

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