JS Securities Limited – Weekly Review

Karachi, November 02, 2018 (PPI-OT): KSE100 index records 3.6% WoW gain

The benchmark KSE-100 index hummed along on its merry way, climbing 3.6% WoW or 1,448 points to 42,004 level, building on the momentum gained from the previous two weeks. Volumes (up 7% WoW) and average value traded (up 26% WoW) also continued to trend upwards during the week. To put things in perspective, the market has cumulatively gained 15% since October 16, 2018, as news flows pertaining to the Saudi loan package lifted investor sentiment and provided clarity regarding the balance of payments (BoP) situation. As per latest news, the Prime Minister is in Beijing at the moment, where further positive developments are anticipated in lieu of BoP support and other potential favourable concessions.

Moreover, talks with IMF are scheduled for next week. On sector-wise development, global crude oil prices declined by 6% WoW, leading to 2% WoW decline in the E and P sector. Moreover, Cements and Automobiles continued their recent rally, up 10% WoW and 5% WoW respectively owing to their preceding overcorrection. Pharmaceuticals also outperformed the benchmark index with gains of 11% WoW on anticipation of a higher CPI reading this month, which was announced at the end of the week, given that medicine price increases have been linked to the CPI.

Meanwhile, CPI for the month of Oct-2018 stood at 7% YoY, as announced on Friday, compared to 5.12% YoY in the preceding month of Sep-2018, indicating a rising inflationary trend. In anticipation of a potential interest rate hike later this month, given higher inflationary readings, Banks also rallied on this news, ending 4% WoW higher.

Other major news during this week included (1) forex reserves fall by US$48 million to five-year low of US$7.7 billion, (2) refineries told to reduce harmful fuel additive, (3) Atlas Honda (ATLH) jacks up two-wheeler prices for 5th time, (4) JUI-F chief Fazl defers multiparty moot against govt, (5) prices of all petroleum products prices increase by Rs5-6.48/liter for Nov- 2018 and (6) Pak Suzuki Motors Co Ltd (PSMC) raises prices by Rs40,000 for its Cultus, Wagon-R and Swift keeping Ravi, Bolan or Mehran prices fixed.

Revenue collection for Oct-2018 shows 3% YoY rise

The revenue collection by the Federal Board of Revenue (FBR) increased by 3% YoY during October 2018, reaching Rs277bn. During 4MFY19, revenue collection clocked in at Rs1,106bn, against target of Rs1,166bn, reflecting a shortfall of Rs60bn.

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JS Securities Limited – Weekly Review

Karachi, November 02, 2018 (PPI-OT): KSE100 index records 3.6% WoW gain

The benchmark KSE-100 index hummed along on its merry way, climbing 3.6% WoW or 1,448 points to 42,004 level, building on the momentum gained from the previous two weeks. Volumes (up 7% WoW) and average value traded (up 26% WoW) also continued to trend upwards during the week. To put things in perspective, the market has cumulatively gained 15% since October 16, 2018, as news flows pertaining to the Saudi loan package lifted investor sentiment and provided clarity regarding the balance of payments (BoP) situation. As per latest news, the Prime Minister is in Beijing at the moment, where further positive developments are anticipated in lieu of BoP support and other potential favourable concessions.

Moreover, talks with IMF are scheduled for next week. On sector-wise development, global crude oil prices declined by 6% WoW, leading to 2% WoW decline in the E and P sector. Moreover, Cements and Automobiles continued their recent rally, up 10% WoW and 5% WoW respectively owing to their preceding overcorrection. Pharmaceuticals also outperformed the benchmark index with gains of 11% WoW on anticipation of a higher CPI reading this month, which was announced at the end of the week, given that medicine price increases have been linked to the CPI.

Meanwhile, CPI for the month of Oct-2018 stood at 7% YoY, as announced on Friday, compared to 5.12% YoY in the preceding month of Sep-2018, indicating a rising inflationary trend. In anticipation of a potential interest rate hike later this month, given higher inflationary readings, Banks also rallied on this news, ending 4% WoW higher.

Other major news during this week included (1) forex reserves fall by US$48 million to five-year low of US$7.7 billion, (2) refineries told to reduce harmful fuel additive, (3) Atlas Honda (ATLH) jacks up two-wheeler prices for 5th time, (4) JUI-F chief Fazl defers multiparty moot against govt, (5) prices of all petroleum products prices increase by Rs5-6.48/liter for Nov- 2018 and (6) Pak Suzuki Motors Co Ltd (PSMC) raises prices by Rs40,000 for its Cultus, Wagon-R and Swift keeping Ravi, Bolan or Mehran prices fixed.

Revenue collection for Oct-2018 shows 3% YoY rise

The revenue collection by the Federal Board of Revenue (FBR) increased by 3% YoY during October 2018, reaching Rs277bn. During 4MFY19, revenue collection clocked in at Rs1,106bn, against target of Rs1,166bn, reflecting a shortfall of Rs60bn.

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