Elixir Securities Limited – Pakistan Market Wrap

Karachi, June 25, 2018 (PPI-OT): Closing Bell – Losses in 4 Sessions Mount to 6.2%

Pakistan equities carried the bearish momentum with Benchmark KSE100 Index breaking the 41,000 level, and closing a stone’s throw away from 2018 lows of 40,711. Index traded in a positive zone for the first ninety minutes but later witnessed a sharp plunge on aggressive selling reportedly by few local asset managers, while foreigners selling also continued unabated with index heavy Financials and Cements bearing most of the brunt. Moreover, Oil and Gas regulator’s proposal of hiking the gas prices also hit the market hard as higher tariffs shall have negative implications for manufacturing sectors like Cements -4.3%, Textiles -3.4% and Chemicals -2.1%; apart from having a spillover impact on demand and inflation (detailed shared earlier in email titled “Pakistan Equity Market – Increase in Gas Tariffs to Burden End Consumers”). Even the Oil and Gas Exploration Sector -1.7% was not spared despite ~4% rise in international crude oil prices over the weekend, post the OPEC meeting.

Expect weakness to persist and volatile trading in the near-term with investors keeping a close watch on ongoing Financial Action Task Force (FATF) meeting which will decide the fate of “Grey-Listing” Pakistan. The ongoing Amnesty Scheme remains the key trigger – News reports suggest of hefty domestic asset declaration that we believe can beef up capital markets liquidity going forward.

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Elixir Securities Limited – Pakistan Market Wrap

Karachi, June 25, 2018 (PPI-OT): Closing Bell – Losses in 4 Sessions Mount to 6.2%

Pakistan equities carried the bearish momentum with Benchmark KSE100 Index breaking the 41,000 level, and closing a stone’s throw away from 2018 lows of 40,711. Index traded in a positive zone for the first ninety minutes but later witnessed a sharp plunge on aggressive selling reportedly by few local asset managers, while foreigners selling also continued unabated with index heavy Financials and Cements bearing most of the brunt. Moreover, Oil and Gas regulator’s proposal of hiking the gas prices also hit the market hard as higher tariffs shall have negative implications for manufacturing sectors like Cements -4.3%, Textiles -3.4% and Chemicals -2.1%; apart from having a spillover impact on demand and inflation (detailed shared earlier in email titled “Pakistan Equity Market – Increase in Gas Tariffs to Burden End Consumers”). Even the Oil and Gas Exploration Sector -1.7% was not spared despite ~4% rise in international crude oil prices over the weekend, post the OPEC meeting.

Expect weakness to persist and volatile trading in the near-term with investors keeping a close watch on ongoing Financial Action Task Force (FATF) meeting which will decide the fate of “Grey-Listing” Pakistan. The ongoing Amnesty Scheme remains the key trigger – News reports suggest of hefty domestic asset declaration that we believe can beef up capital markets liquidity going forward.

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