RECORDER REVIEW
KARACHI: Pakistan Stock Exchange remained under pressure during the outgoing week ended November 30, 2017 due to selling by both local and foreign investors.
BRIndex100 lost 29.98 points on week-on-week basis to close at 4,264.84 points. Average daily trading volumes stood at 118.431 million shares.
BRIndex30 gained 89.34 points to close at 21,378.45 points with average daily turnover of 89.502 million shares.
Pakistan’s benchmark KSE-100 index declined by 238.05 points on week-on-week basis and closed the week at 40,010.36 points. Trading activities on the ready counter slightly improved as average daily volumes increased by 15.8 percent to 129.91 million shares as compared to previous week’s average of 112.21 million shares. Average daily trading value increased by 62.7 percent to Rs 8.05 billion.
The foreign investors remained net sellers of shares worth $39.4 million during this week as compared to net outflow of $6.28 million in the previous week. Total market capitalization increased by Rs 19 billion to Rs 8.375 trillion.
An analyst at AKD Securities said despite a peaceful end to the 21 day long sit-in that resulted in the Law Minister’s resignation, the market continued to reel under pressure, breaching 40,000 psychological bearer for the third time since October 2017 but managed to close at 40,010 points (down 0.59 percent on week-on-week basis. Apart from challenges on the political front, investors chose to remain on the sidelines ahead of the MSCI rebalancing on November 30, 2017 with foreigners offloading $39.54 million worth of equities during the week against net outflow of $6.28 million in the previous week. That said, positive news flow on the macro front (successful Eurobond/Sukuk issuance in the global market) led to some recovery towards the end of the week. Performance wise, scrips leading the bourse were KEL (up 5.16 percent), UBL (up 5.06 percent), ENGRO (up 3.39 percent), NBP (up 2.82 percent) and MCB (up 1.75 percent), while laggards included PSMC (down 5.8 percent), HASCOL (down 4.69 percent), KAPCO (down 4.39 percent), CHCC (down 3.79 percent) and PPL (down 3.38 percent).
An analyst at JS Global Capital said that the benchmark KSE-100 index registered only a marginal decline of 0.6 percent to close at 40,010, thanks to a timely resolution between the government and religious parties. Protests from these religious parties were witnessed across the country over the weekend after the government had launched an operation against their sit-ins in Islamabad. The sentiments progressively improved during the week as the Prime Minister agreed to utilize local furnace oil to run power plants, giving some respite to Oil Refineries, which had come under pressure during the past week due to sudden shift in government’s policy of using RLNG in place of furnace oil. On the last trading day, news emerged of Pakistan successfully raising $2.5 billion through $1.5 billion of 10-year Eurobonds and $1.0 billion of 5-year Sukuks from the international bonds market. The pricing terms also appear favorable given that the profit rates on Eurobonds and Sukuks settled at 6.875 percent and 5.625 percent, respectively vis-à-vis Initial Pricing Talks (IPT) of around 7.0 percent and 6.0 percent, respectively.
An analyst at Arif Habib Limited said that the outgoing week shed 238 points from the domestic equity bourse, to close at 40,010 points. The week started off with an extension of the negative sentiment in the investment climate spewing from last week’s announcement to suspend high cost furnace oil based power plants.
However on Thursday confidence in the equity market revived on the back of successful issuance of Eurobonds and Sukuks worth $ 2.5 billion.
