MARKET REVIEW
The week started off on a bullish note continuing last week’s bullish rally amid clarity on the political situation. The index gained 2.1%WoW to close at 46,877 points. Investor confidence also increased in the market as indicated by a significant surge in ADT and ADTV rising 75.9%WoW and 61.6%WoW to 349mn shares and USD157mn respectively. FIPI continued to remain net outflow during the week (USD41mn).
PBS reported inflation of 2.91%YoY in Jul’17 as compared to 3.93%YoY and 4.12%YoY in Jun’17 and Jul’16 respectively. The inflation numbers were largely below consensus estimates where the industry expected inflation to clock at 3.3%YoY.
During the week, Steel melters paying sales tax through electricity bills were allowed to adjust their sales tax paid at import stage. Also, textile sector is expected to get payments of upto PKR15bn under sales tax refunds till 15th Aug’17.
SBP reported a decline in reserves by USD718mn to USD15.5bn, taking total liquid foreign reserves to USD20.8bn (down by 2.9%WoW). Moreover, current account deficit widened by a massive 148.5%YoY to an all-time high of USD12.1bn in FY17. On the other hand, LSM sector grew by 5.6%YoY in 11MFY17 (+6.3%YoY in May-17) with substantial growth in Automobiles (12.2%YoY) and Iron & Steel (20.2%YoY) sectors.
OUTLOOK
With settling of political noise and upcoming financial result of companies, we expect fundamentals to take the front seat and earnings expectations to drive the Index.
ECONOMIC HIGHLIGHTS & DATA POINTS
Forex reserves down $153 million | (BR): The country’s total liquid foreign exchange reserves declined by $153 million during last week. During the week under review, SBP”s reserves decreased by $305 million to $14.698 billion, while the reserves held by banks moved up by $ 152 million to $5.485 billion at the end of last week.
Finance division calculates external public debt at $58.4bln | (The NEWS):Finance division on Wednesday measured the external public debt at $58.4 billion as of end-March 2017, rejecting a misreported figure of $79.2 billion in media as a ‘mere projection’, which it said includes private sector external debt and liabilities.
Public debt rises to Rs20.807 trillion in May | (The NEWS):Pakistan’s public debt increased by 11.38 percent against a year earlier to Rs20.807 trillion in May, the central bank’s data showed on Wednesday.
PM’s ouster raises risk profile for investors: Moody’s | (The NEWS):: Political strife constrains Pakistan’s credit profile, Moody’s Investors Service said in an email to Bloomberg.
CPI inflation clocks in at 2.91 percent year-on-year in July | (The NEWS):Consumer price inflation clocked in at 2.91 percent year-on-year in July mainly due to increase in prices of non-perishable products, officials said on Tuesday.
FBR collects Rs200 billion in July, up 20pc MoM | (The NEWS):The Federal Board of Revenue (FBR) has collected Rs200 billion in the first month (July 2017) of the current fiscal year 2017-18 against a collection of Rs164 billion in the same month of the last financial year 2016-17, registering a growth by 20 percent.
SECTOR AND CORPORATE HIGHLIGHTS
Fertiliser subsidy process simplified| (DAWN): The government has simplified the process for disbursing pending payments to fertiliser manufacturers under the subsidy schemes of 2015-16 and 2016-17.
Steel melters paying sales tax via electricity bills allowed adjustment | (The NEWS): Steel melters paying sales tax through electricity bills would be eligible to adjust their paid sales tax at import stage as per the procedure issued by the Federal Board of Revenue (FBR) on Wednesday.
Sugar becomes dearer as millers hold supplies | (DAWN) Neutral:The wholesale price of sugar swelled to Rs54-56 per kilogram from Rs47 three days ago owing to the suspension in supplies by sugar mills.
Dalda plans Rs7bn share offer for public | (DAWN): Dalda Foods Ltd and its parent company are going to raise more than Rs7 billion through the stock market by selling 25 per cent shares in the edible oil business, according to a recent regulatory filing.
Textile sector may get over Rs 15 billion refunds by August 14 | (BR): An amount of Rs 15,209 million sales tax refunds is expected to be paid to the textile sector by August 14, 2017. Sources told Business Recorder Thursday that the FBR has prepared details of the pending liabilities such as sales tax with ageing where refunds have not being paid even after issuance of Refund Payment Orders (RPOs).
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STOCK MARKET SYNOPSIS
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LAST WEEK
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THIS WEEK
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% CHANGE
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Mkt. Cap (US $ bn)
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86.4
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88.3
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2.2%
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Avg. Dly T/O (mn. Shares)
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174.7
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133.9
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-23.3%
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Avg. Dly T/O (US$ mn.)
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92.3
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71.5
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-22.5%
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No. Of Trading Sessions
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5.0
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5.0
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0.0
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KSE 100 Index
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44,337.4
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45,294.4
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2.2%
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KSE ALL Share Index
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31,097.0
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31,778.8
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2.2%
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