KSE-100 climbs 4% to 39,049, likely to remain positive

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Weekly stock report

Karachi

The benchmark KSE-100 closed at 39,049pts, up by 1,502pts or 4.0% WoW, this is second highest weekly gain in last twelve month). This week trading commenced on a positive note and gained over 1,000pts on Monday as the crown prince of United Arab Emirates (UAE) announced a financial support package of USD 3bn as well as further plans to provide a USD 3bn oil facility.
Furthermore, Financial Action Task Force (FATF) expressed encouraging remarks over Pakistan’s efforts to control money lauding and terror financing which fueled investor’s sentiment.
On the other hand, rising international oil prices and enticing valuations attracted market participants to build positions in the E&P sector.
Contribution to the upside was led by Oil and Gas Exploration (606pts) due to surge in international oil prices, ii) Commercial Banks (348pts), Fertilizers (252pts) amid news regarding settlement on GIDC matter, Oil and Gas Marketing (103pts), and Cements (69pts). Scrip wise major gainers were PPL (259pts), OGDC (169pts), POL (146pts), FFC (121pts) and HBL (118pts). While, sectors that contributed negatively to the index were i) Tobacco (-41pts), ii) Miscellaneous (-29pts) and iii) Chemical (-15pts).
Foreign investors accumulated stocks worth of USD 0.6mn this week compared to net selling of USD 0.5mn last week. Buying was concentrated in Commercial Banks (USD 1.7mn), and Cements (USD 1.2mn).
On the local front, Mutual Funds led the bullish sentiments, displaying major buying at the index worth USD 6.7mn followed by Broker Proprietary (USD 6.4mn).
That said, average daily volumes for the outgoing week were up by 18% to 139mn shares likewise value traded jumped by 12% to USD 46mn. Other major news: USD 3bn financial assistance sealed as Abu Dhabi Crown Prince meets PM Khan, Trade deficit shrinks by 5% in first half of FY19, FATF satisfied with bid to curb money laundering, say officials, SBP reserves decline 3.28%, amount to USD 7.05bn, Remittances rise 10% to USD 10.7bn in first half of FY19, and Furnace oil based power plants made operational. Going forward, market likely to remain positive given some material positive events are expected to take place including Saudi energy minister is arriving in Pakistan tomorrow and expectation to establish largest oil refinery in Pakistan.
In addition, fulfillment of commitments made by Prime Minister to the members of stock exchange during his visit regarding abolition of advance tax and allowance of capital losses to be carried forward will lift investor sentiment.

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