MARKET REVIEW
The stock market maintained the downward trajectory in this week (except Tuesday, where the market exhibited meager recovery of 287pts), closing at 43,078pts, a decrease of 4.9% from the prior week amidst political uncertainty. Weaker participation in the market can be attributed to receding investor’s confidence, where ADT decreased by 3.4%WoW on the contrary a 2.6%WoW increase in ADTV depicts a shift towards large cap stocks. Foreigner has also been a net seller in this week exhibiting an outflow of USD2mn.
During the week, MLCF issued 12.5% rights to finance its brownfield expansion. Cane Commissioner of Punjab ordered the auction for 7 sugar companies that failed to pay outstanding amount of PKR1.84bn to the farmers for last year’s harvest. Additionally, Siddiqsons Energy Limited had announced to relocate its coal fired plant to Thar, to contain its transportation costs.
On the macro front, country’s foreign exchange reserves have declined by USD62mn, currently standing at USD19.94bn accredited to external debt repayments. However, country’s service exports have also witnessed a growth of 1.67%YoY and FDI has recorded a remarkable growth of 163%YoY in Jul’18.
OUTLOOK
We expect the market to remain dull with the prevailing political ambiguity and recommend a cautious approach for the investors.
NEWS THIS WEEK
ECONOMIC HIGHLIGHTS & DATA POINTS
Service exports grew 1.7pc in 2016-17 | (DAWN):The country’s service exports recorded a growth of 1.76 per cent year-on-year to USD5.6bn in 2016-17, the Pakistan Bureau of Statistics said on Tuesday.
Govt to release PKR120bn to ministries for development spending in July-Sept | (The NEWS): Government will disburse more than PKR120bn to ministries and divisions under public sector development program (PSDP) during the first three months of the current fiscal year of 2017/18, meeting around 30 percent of the annual allocation of PKR377.9bn for them, officials said on Tuesday.
Foreign investment reaches USD222.6mn in July | (BR): Foreign Direct Investment (FDI) into the country surged by 162.8 per cent to USD222.6mn in July 2017 as compared to the investment of USD84.7mn during same month of previous year.
Sell-off process shelved | (BR): The federal government has reportedly shelved privatization process almost entirely, inclusive of power sector companies, for the remaining PML-N tenure due to political uncertainty
Forex reserves slip below USD20bn | (BR): The country’s foreign exchange reserves continued to weaken, reaching below USD20bn at the end of last week. According to State Bank of Pakistan’s weekly report issued Thursday, week-on-week basis, the country’s forex reserves declined by USD62mn during last week. Pakistan’s total liquid foreign exchange reserves stood at USD19.9bn on August 11, 2017 down from USD20.004bn on August 4, 2017.
SECTOR AND CORPORATE HIGHLIGHTS
Profit margins of oil companies, dealers likely to go up| (DAWN): The maiden meeting of the reconstituted Economic Coordination Committee (ECC) of the cabinet is expected this week to consider increasing profit margins of oil marketing companies (OMC) and dealers through prices of petroleum products.
Coal-fired plant relocated to cut transportation cost| (The NEWS): Siddiqsons Energy Limited (SEL), intending to become the first coal independent power producer, decided to relocate its supercritical coal-fired power plant to Thar – the commodity’s hotbed in Sindh – from a previously planned location of Port Qasim to curtail transportation cost.
Maple Leaf plans to raise PKR4.3bn through rights issue | (The NEWS):Maple Leaf Cement (MLCF) plans raising around PKR4.3bn through a right issue to partially finance its additional dry process clinker production line being setup at a cost of PKR23bn, a bourse filing said on Tuesday.
Auction for 7 defaulter sugar mills ordered | (BR) Negative:The Cane Commissioner Punjab has ordered attachment and auction of seven sugar mills which failed to pay outstanding amount of PKR1.84 bn to sugarcane farmers during 2016-17.
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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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89.4
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85.3
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-4.6%
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Avg. Dly T/O (mn. shares)
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189.9
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183.5
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-3.4%
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Avg. Dly T/O (US$ mn.)
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91.5
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93.8
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2.6%
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No. of Trading Sessions
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5.0
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4.0
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0.1
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KSE 100 Index
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45,288.5
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43,078.4
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-4.9%
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KSE ALL Share Index
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32,079.7
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30,621.3
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-4.5%
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