Karachi, December 22, 2017 (PPI-OT): Weekly Review
Breaking its last five week negative momentum (where benchmark index lost 6.7% or 2,790pts), market came back strongly into green zone mid-week to close the KSE-100 index at 39,471 (up 2.13%WoW or 825pts). Broad base recovery in the market was led by strong performance of Steel and Cement sector along with the positive development regarding introduction of Category B in PSX to eligible more companies (28-30) for margin trading system (MTS).
Average daily traded volumes improved slightly by 2.31%WoW to 138.18mn shares with 1) TRG (63.99mn shares), 2) WTL (43.26mn shares), 3) KEL (35.87mn shares), 4) DSFL (31.50mn shares) and 5) LOTCHEM (27.10mn shares) leading the board. Key news flows impacting the market during the week included: 1) the Senate passing delimitation of constituencies bill paving the way for timely election, 2) Nawaz Sharif nominating his brother (Punjab CM Shahbaz Sharif) as the candidate for the prime minister in the next general elections, 3) World Bank approving a loan amounting US$825mn to modernize the national power transmission system and improve health and education service delivery in Pakistan, 4) country’s CAD widening by 90.7%YoY to reach US$6.43bn in 5MFY18, where both export/imports witnessed upward trend, rising 12%/23.4%YoY to US$9.79bn/US$21.88bn and 5) United Motors revealing its plan to launch 800cc car and pickup in co-operation with Chinese bike maker-‘United Auto Industries”.
Performance leaders during the week were: 1) UBL (+10.8%WoW), 2) HBL (+7.2%WoW), 3) NBP (+7.2%WoW), 4) FATIMA (+6.9%WoW) and 5) BAFL (+5.8%WoW); while laggards included: 1) POL (-4.4%WoW), 2) GWLC (-4.3%WoW), 3) HUBC (-2.5%WoW), 3) APL (-1.9%WoW) and 5) DGKC (-1.6%WoW). Foreign participation remained in the negative zone with US$5.44mn outflows compared to US$8.87mn outflows in the preceding week.
Renewed optimism in the local bourse on the back of, 1) SECP initiative to increase companies eligible for MTS with the introduction of category B, 2) positive development on the political front and 3) stable int’l oil prices expected to drive bullish momentum in the week ahead as well. Moreover, market may also continue to take cue from fund managers’ year-end window dressing ahead of the New Year.