KSE-100 Index moved up with a gain of 173 points to close in green at 46,358 levels yet in a thin market volume of 340 all shares on Thursday. Aisha Steel managed to retain its position of volume leader of the day with a trade of 19 million shares to its credit while TRG Pakistan and Engro Polymer were second and third volumes with respective trade of 15 million and 14 Accordingly.
The international oil prices however fell nearly 4% in the previous session to US$51.88/bbl as oversupply concerns grew after OPEC, in a monthly report, said that without cuts the 2017 glut would reach 1.24mnbpd, nearly 0.3mnbpd higher than the forecast in its previous report.
However, the prices were little supported after EIA reported an unexpected draw of 2.6mnbbl. The rally was short-lived after U.S. rate hike sent dollar higher, making greenback-traded fuel imports more expensive. Meanwhile, the IMF, in-line with our expectations, remains positive on CPEC-led growth in the long-term, though concerns on import financing and overall transparency of the projects remain. GDP growth is expected to be close to 5% in FY17 (BIPLS: 5.0%), particularly on the back of expected recovery in agriculture sector.
The IMF believes FX reserves level is sufficient to provide the cushion for next two to three years in case of negative balance of payments during the period arising from commodity price hike. IMF believes the CPEC is net negative for external account, taking into account the return component to be provided on energy and infrastructure projects, debt servicing and fuel sourcing in some cases, once all the projects are operational.