JS Securities Limited – Weekly Review

Karachi, December 08, 2017 (PPI-OT): PKR/USD makes surprise movement, but KSE-100 closes 2.3% WoW lower

Political tug-of-war remained the major point of concern amidst the market participants during the outgoing week. Amidst the ambiguity, the benchmark KSE-100 index continued to bleed, declining by 2.3% WoW to close at 39,080 pts. Almost all major heavyweights such as (1) Oil and Gas Marketing (down 7.5% WoW), (2) Cements (down 2.8% WoW) and (3) Fertilizers (down 3.0% WoW) witnessed heavy battering. Some respite to the index was offered by the E and P sector mainly on the back of elevated international crude oil prices and overall realignment of investors towards sectors offering benefits in the case of PKR devaluation against the Greenback.

The parity of Rs105/US$ finally saw some movement on the last trading day of the week with interbank rate touching the mark of Rs110/US$ against yesterday’s closing of Rs105/US$ in response to declining FX reserves amidst debt repayments. However, the same closed at 107. Apart from this, key highlights of the week were (1) cement sales numbers (+5.2% YoY in Nov-2017), (2) suspension of Furnance Oil (FO) imports by PSO on shut-down of FO based power plants and (3) CPI inflation numbers (+3.97% YoY in Nov-2017).

SBP issues press release on PKR/USD

The State Bank of Pakistan (SBP) is of the view that today’s market-driven adjustment in the exchange rate will contain the imbalance in the external account and sustain higher growth trajectory. The exchange rate will continue to reflect the demand and supply conditions; and SBP stands ready to intervene, in case speculative and/or momentary pressures emerge, for smooth functioning of the foreign exchange markets.

Govt. puts weight behind KEL

The Federal and Sindh governments on Tuesday joined hands with K-Electric (KEL) for an upward revision in Multi-Year Tariff (MYT) for seven years to be effective from July 2016 to June 2023, aimed at making the company financially viable by lowering recovery and losses benchmarks.

Cement sales up 6% YoY in Nov-2017

All Pakistan Cement Manufacturers Association (APCMA) released data on cement dispatches for the month of Nov-2017, continuing growth trajectory and clocking-in at 3.96mn tons (+5.6% YoY). Trend in local demand growth (+10.7% YoY in Nov-2017 to 3.62mn tons) remained the major demand driver. Export sales continued their downward trajectory, down by 29.0% YoY to 0.34mn tons vis-a-vis 0.48mn tons in the corresponding period last year.

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JS Securities Limited – Weekly Review

Karachi, December 08, 2017 (PPI-OT): PKR/USD makes surprise movement, but KSE-100 closes 2.3% WoW lower

Political tug-of-war remained the major point of concern amidst the market participants during the outgoing week. Amidst the ambiguity, the benchmark KSE-100 index continued to bleed, declining by 2.3% WoW to close at 39,080 pts. Almost all major heavyweights such as (1) Oil and Gas Marketing (down 7.5% WoW), (2) Cements (down 2.8% WoW) and (3) Fertilizers (down 3.0% WoW) witnessed heavy battering. Some respite to the index was offered by the E and P sector mainly on the back of elevated international crude oil prices and overall realignment of investors towards sectors offering benefits in the case of PKR devaluation against the Greenback.

The parity of Rs105/US$ finally saw some movement on the last trading day of the week with interbank rate touching the mark of Rs110/US$ against yesterday’s closing of Rs105/US$ in response to declining FX reserves amidst debt repayments. However, the same closed at 107. Apart from this, key highlights of the week were (1) cement sales numbers (+5.2% YoY in Nov-2017), (2) suspension of Furnance Oil (FO) imports by PSO on shut-down of FO based power plants and (3) CPI inflation numbers (+3.97% YoY in Nov-2017).

SBP issues press release on PKR/USD

The State Bank of Pakistan (SBP) is of the view that today’s market-driven adjustment in the exchange rate will contain the imbalance in the external account and sustain higher growth trajectory. The exchange rate will continue to reflect the demand and supply conditions; and SBP stands ready to intervene, in case speculative and/or momentary pressures emerge, for smooth functioning of the foreign exchange markets.

Govt. puts weight behind KEL

The Federal and Sindh governments on Tuesday joined hands with K-Electric (KEL) for an upward revision in Multi-Year Tariff (MYT) for seven years to be effective from July 2016 to June 2023, aimed at making the company financially viable by lowering recovery and losses benchmarks.

Cement sales up 6% YoY in Nov-2017

All Pakistan Cement Manufacturers Association (APCMA) released data on cement dispatches for the month of Nov-2017, continuing growth trajectory and clocking-in at 3.96mn tons (+5.6% YoY). Trend in local demand growth (+10.7% YoY in Nov-2017 to 3.62mn tons) remained the major demand driver. Export sales continued their downward trajectory, down by 29.0% YoY to 0.34mn tons vis-a-vis 0.48mn tons in the corresponding period last year.

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