KARACHI: In the outgoing week, institutional investors fell over one another in a bid to be the first to take positions in attractive value-plays in the banking, oil and gas and cement sectors which sent the KSE-100 index scurrying up by 1,035 points (2.4 per cent) to close at 43,948.
It represented third week of a gaining spree for the Pakistan stock market. Investors’ interest in the outgoing week was centred on the political developments. They were encouraged by the smooth transition of power to the caretaker setup and filing of nomination papers by the candidates, which they believed paved way for the timely elections on July 25.
Investors visualised some ease of pressure on external account as the interimFinance Minister Dr Shamshad Akhtar hinted towards the caretaker government’s willingness to enter International Monetary Fund programme in order to achieve macro stabilisation.
Pakistani equities have so far provided a positive return of 2.4pc in the first five sessions of the caretaker setup. Most analysts affirmed that the average return during the past interim governments remained between 14-17pc. On the last trading day (Thursday), the indexdeclined 196 points due to profit-taking and downward revision of the World Bank’s GDP growth projection for Pakistan for 2018-19.
Sectors that led the index to an upward journey includedcommercial banks, adding573 points, oil and gas marketing companies 138 points, cement 126 points, oil and gas exploration 78 points and fertiliser 60 points. Power generation and distribution pulled the index down by 35 points.
Top gaining scrips during the week included Habib Bank, increasing by 194 points, United Bank 134 points, Lucky Cement 89 points, Bank Al Habib 83 points and Sui Northern Gas Pipelines 70 points. On the flip side, major laggards were Hub Power, decreasing by 15 points, and ICI Pakistan 15 points.
Foreign selling continued for the fifth consecutive week at $29.6 million, taking the year-to-date net sales to $17.5m. Foreign flows were concentrated mainly in commercial banks at $8.4m and cement $9m. On the domestic front, insurance companies stood out as the most aggressive buyers of $18m worth equity followed by companies $7m, banks $4.5m and individuals $4.9m.
Despite the four-session weekend and shorter trading time in Ramazan, average volume settled at 184m shares, up 54.4pc over the earlier week while the average traded value climbed 62pc to $78m.Bank of Punjab at 153.87m shares, Pak Elektron 55.58m shares, TRG Pakistan 30.23m, Pakistan International Bulk Terminal 29.57m shares and Sui Southern Gas Company 26.52m shares remained the leaders.
Commercial banks rose 4.6pc on account ofenticing valuation and anticipation of higher interest rates, going forward. Among top banks, United Bank went up by 8pc, Habib Bank 7pc, and MCB Bank 4pc.
With a three-day upcoming trading week, market is forecast to remain range-bound. Events to watch would be the accountability court’s decision in graft references case (due on Jun 9) against the former PM Nawaz Sharif. Financial Action Task Force meeting to be held from 24-26 June will be closely tracked as it will decide whether Pakistan should be included in the terror-financing greylist or not.
Major news flow during the outgoing week included Pakistan, Russia set to sign $10bn offshore pipeline deal,the World Bank cutting down its projections for Pakistan’s GDP growth to 5pc against officially envisaged target of 6.2pc for 2018-19, the public sector enterprises’ (PSEs) debt mounting to Rs1 trillion at the end of third quarter of FY18 and the State Bank of Pakistan reporting headline inflation for May’18 ticking up to 4.2pc year-on-year as the impact of petroleum price hike and rupee depreciation became prominent.
Published in Dawn, June 10th, 2018