Zubair Yaqoob
Karachi
The market commenced on a negative note this week, losing 900 points during the intraday trading. Tensions on Indo-Pak border kept the momentum suppressed during the week. Bulls took over after IMF expressed contentment in first quarterly review regarding improvement in external side in the light of market determined exchange and steady improvement on the fiscal front.
Furthermore, IMF allowed Pakistan to change performance standards for issuance of sovereign guarantees. Albeit market closed at 40,848 points, gaining 16 points (up by 0.04% WoW) as 2019 approached its end. Sector-wise positive contributions came from Commercial Banks (43pts), Power Generation & Distribution (42pts), Oil & Gas Marketing Companies (19pts), Engineering (15pts), and Cement (13pts). Whereas, negative sector-wise contribution came from Insurance (31pts), Tobacco (31), Automobile Parts & Accessories (21pts) and Fertilizers (17pts). Scrip-wise positive contributions were led by ENGRO (70pts), HUBC (55pts), OGDC (39pts), PSO (20pts) and UBL (18pts). Foreign selling was witnessed this week clocking-in at USD 2.9mn compared to a net buy of USD 3.1mn last week. Selling was witnessed in Exploration & Production (USD 1.5mn) and Commercial Banks (USD 0.7mn). On the domestic front, major buying was reported by Insurance Companies (USD 10.5mn) and Mutual Funds (USD 7.2mn). Average Volumes settled at 230mn shares (down by 23% WoW) while average value traded clocked-in at USD 54mn (down by 35% WoW). Other major news: PPL announces two oil and gas discoveries in Sindh & Balochistan,
NEPRA allows Discos to charge additional Rs1.56/unit, Rice exports up 39pc to 1.6mln tons in 5 months, Urea fertilizer prices likely to increase by Rs600 per 50-kg bag, and SBP reserves jump USD 14mn to USD 10.9bn. Analysts expect the market to be positive in the coming week. With SBP reserves climbing up and stable Pak Rupee/USD parity the investors’ sentiment should remain positive. Furthermore, Pakistan has received second tranche of PKR 452mn of IMF loan. Moreover, new portfolio allocations are expected from the start of the New Year, which can improve the market sentiment and flows.
