MARKET REVIEW
Index broke its losing streak despite political noise & low international oil price and closed the week at 48,971pts, up by 1.2%WoW. FIPI registered net inflow of US$3.5mn. Average volume traded increased by 38.9%WoW while average value traded decreased by 7.6% WoW.
During the week Nepra reduced average electricity tariff for K-Electric by PKR3.50/unit for the next seven years while also doing away with its service’s monopoly. However, it also revised K-Electric’s benchmark T&D losses curve. KEL’s management termed the new multiyear tariff as detrimental to long-term investment and is expected to file a review petition. Additionally, groundbreaking ceremony of Hub Power Company’s (HUBC) 1,320 MW imported coal project China Power Hub Generation Company (CPHGC) was held during the week. Fertilizer numbers released by NFDC for the month of Feb-17 showed 18%YoY decline in urea off-take. As a result urea inventory levels rose to 1.19mn tons.
On the macro front, LSM grew by 3.48% YoY in 7MFY17. Furthermore, country’s Current Account Deficit (CAD) surged by 120%YoY to USD5.4bn.
OUTLOOK
Moving forward, we expect SBP to keep its policy rate unchanged in the monetary policy meeting to be held on 25th March (tomorrow). Furthermore, political noise and international commodity prices can be expected to impact the direction of the market. Our top picks are OGDC, BAHL, HBL, EFERT, PSO, PIOC and DGKC.
NEWS THIS WEEK
ECONOMIC INDICATORS & DATA POINTS
LSM GREW BY 3.48% YOY IN 7MFY17 (DAWN): LSM grew by 3.48% YoY in 7MFY17, below the target of 5.9% set for the current fiscal year. Textile sector showed a marginal growth of 0.29%YoY during the 7MFY17 compared to 0.92%YoY a year ago.
CURRENT ACCOUNT DEFICIT SURGES BY 120% (DAWN): Current account deficit widened by more than 120% to USD5.4bn in 8MFY17. Current account deficit was 2.6% as a percentage of GDP in 8MFY17 as opposed to 1.3% during the same period in the preceding year.
MONETARY POLICY ON 25TH (DAWN): SBP will announce its next bimonthly monetary policy on Saturday, March 25th 2017.
SECTOR AND CORPORATE HIGHLIGHTS
GOVT CANCELS MEETING WITH IPPS AT THE ELEVENTH HOUR (DAWN): Ministry of Water and Power cancelled meeting with IPP citing an advertisement published by the private producers in the newspapers.
WAPDA TO ADD 2,485MW OF CHEAP ELECTRICITY BY MID-2018 (TRIBUNE): Wapda has announced that it will be able to add 2,485MW to the national grid with the completion of three hydroelectric power projects by the mid of 2018.
GOVT GEARS UP TO AUCTION LAST 4G SPECTRUM (TRIBUNE): Government is set to auction the last spectrum of 4G mobile internet at a minimum price of over $210 million in May-June.
EOI FOR GEPCO (DAWN): Government has invited Expression of Interest for appointment of lead manager and book runner for Gujranwala Electric Power Company for listing of upto 15% shareholding.
KE’S AVERAGE TARIFF CUT BY PKR3.50/UNIT FOR SEVEN YEARS (DAWN): Nepra has cut average electricity tariff for K-Electric by PKR3.50/unit for the next seven years besides legally doing away with its service monopoly.
HUB COAL PLANT CONSTRUCTION KICKS OFF TODAY (DAWN): Groundbreaking ceremony of the 1,320 MW, USD2bn coal project by China Power Hub Generation Company will be held today.
HIGH-POWERED COMMITTEE ON K-ELECTRIC TO REVIEW NEPRA’S DECISION (DAWN): After a meeting between Prime Minister and Chinese delegation, a special ministerial committee has gone into an emergency huddle to seek review of multi-year tariff announced by Nepra to avoid flight of prospective Chinese investment.
HBL SELLS KENYAN ASSETS FOR ADDITIONAL STAKE IN DTB (DAWN): HBL has disclosed that it has entered into an agreement with Diamond Trust Bank (DTB) Kenya to sell HBL’s business in Kenya in exchange for additional 4.18% shares in DTB.
[ads1]
|
STOCK MARKET SYNOPSIS
|
|||
|---|---|---|---|
|
LAST WEEK
|
THIS WEEK
|
% CHANGE
|
|
|
Mkt. Cap (US$bn)
|
90.9
|
92.0
|
1.2%
|
|
Avg. Dly T/O (mn. shares)
|
185.6
|
257.8
|
38.9%
|
|
Avg. Dly T/O (US$ mn.)
|
108.5
|
100.2
|
-7.6%
|
|
No. of Trading Sessions
|
5.0
|
4.0
|
1.0
|
|
KSE 100 Index
|
48,409.4
|
48,971.1
|
1.2%
|
|
KSE ALL Share Index
|
32,707.8
|
33,161.3
|
1.4%
|