KSE-100 gains 962 points during week

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Zubair Yaqoob

Karachi

KSE-100 commenced on a positive note this week amid 1QFY19 tax collection being reported at 90% of the IMF target.
Investors’ expectations seemed to reflect optimism with regards to the first quarter IMF targets being met. Moreover, news of increase in cement prices in the Northern Region as per PBS was the major driver for the Cement sector throughout the week. Later in the week a meeting of business community with the Army Chief and PM Khan improved the sentiment further due to anticipation of remedial measures to address outstanding economic issues. Despite decline in international crude oil prices the Oil & Gas Exploration scrips resisted pressure. The overall positivity in the investment climate was complimented by jubilant volumes. The KSE-100 index gained 962 points (up by 3.00%) WoW, closing at 33,033 points. Sector-wise positive contributions came from Commercial Banks (231pts), Cements (189pts), Power Generation & Distribution (96pts), Oil & Gas Marketing (93pts), and Fertilizer (68pts). Scrip-wise positive contributions were led by HBL (103pts), HUBC (52pts), ENGRO (51pts), DGKC (50pts) and NBP (50pts). Foreign selling continued this week clocking-in at USD 4.7mn compared to a net sell of USD 8.8mn last week. Selling was witnessed in Commercial Banks (USD 4.6mn) and Food and Personal Care (USD 1.7mn). On the domestic front, major buying was reported by Other Organizations (USD 4.9mn) and individuals (USD 4.4mn). Average Volumes settled at 223mn shares (up by 106% WoW) while average value traded clocked-in at USD 40mn (up by 58% WoW).
Other major news: Petroleum product prices left unchanged, ii) Suzuki raises Alto and bike prices, KE signs $50m loan pact, Nepra allows Rs1.66 hike in power tariff and Chinese company to setup ceramic unit. Analysts view the market to remain positive in the coming week.
However, profit-taking cannot be ruled out. Major developments next week include PM Khan’s visit to China aimed at reviving CPEC Projects and removing impediments. The KSE-100 index is currently trading at a PER of 5.8x (2020) compared to Asia Pac regional average of 13.0x and while offering DY of ~9.4% versus ~2.5% offered by the region.

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