Zubair Yaqoob
Karachi
The market commenced on a negative note this week primarily due to uncertainty over the FATF outcome from the meetings held this week. During the week investor sentiment improved after three countries (China, Turkey and Malaysia) voted in favor of Pakistan, which eventually helped save the country from being blacklisted by FATF.
However, Pakistan still remains on grey list of FATF. Weekly return turned negative after a 2-week bull run with the KSE-100 index closing at 33,870 points, shedding 606 points (down by 1.8%) WoW. Sector-wise positive contributions came from Fertilizers (99pts), Food & Personal care products (15pts), and Chemical (14pts) while negative contributions were led by Banks (279pts), Cement (89pts) and E&P Companies (78pts).
Scrip-wise negative contributions were led by HBL (111pts), UBL (84pts), LUCK (65pts), HUBC (58pts) and POL (57pts). Foreign selling continued this week clocking-in at USD 2.1mn compared to a net sell of USD 4.2mn last week. Selling was witnessed in Commercial Banks (USD 3.4mn) and Exploration & Production (USD 1.0mn). On the domestic front, major buying was reported by Individuals (USD 8.4mn) and Banks / DFIs (USD 5.4mn).
Average Volumes settled at 140mn shares (down by 51% WoW) while average value traded clocked-in at USD 30mn (down by 47% WoW). Other major news: OGRA, Finance Division suggest rationalization of oil margins, Forex reserves rise to $15.142bln, Rs160.5bln PSDP disbursement approved, Hydrocarbon reserves discovered and FBR sets Rs1.29tr tax collection target for third quarter. Analysts expect the market to be range bound next week. Pakistan may have narrowly escaped being blacklisted, but the FATF has tasked the government to address outstanding issues by Feb’20, in order to avoid being placed on the black list.
