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BULLISH RALLY ENDS YEAR TO FRESH RECORD HIGH
SUMMARY

The last week of 2016 at Pakistan Stock Exchange (PSX) in a bullish trend endorsed the excellent performance of PSX being declared as Best Market in Asia with 46% return.PSX was not only top performing amongst Asian markets but also it was the top performing market in MSCI Frontier Markets. PSX posted 5th highest return in the world.

The landmark development during 2016 was sale of 40% share of PSX to Chinese consortium at $215 million hoping new products and better governance that will go a long way in development of Pakistan Capital Market.

During the week, stocks gained 1,173 points to close on Friday at its highest ever mark of 47,800.97. The stocks were bullish in all its five sessions of the week.

On first day of the week on Monday, stock started off on a high note after a three-day correction of last week. Later on profit-taking sets in but still the KSE-100 Index finished with gain of 55.74 points to close at 46,689.73. The auto sector attracted investors interest as it rose 2% over the previous session close. The volume decreased to 179 million shares.

On Tuesday the market gained steadily during the day. The investors showed interest in select blue chips across financial, oils and cement. KSE-100 Index finished with gain of 230.74 points to close at 46,920.47. Bullish spell deepens on Wednesday when KSE-100 gained 504.16 to close at 47,424.63. Trading activity also improved to 273 million shares. The banking sector emerged as the top contributor with MCB (+4.34pc), HBL(+1.14 pc) and UBL (+1.54pc) contributing 119 points.

On Thursday a new high of 47,666.66 was seen gaining 242.03 points. The volume too increased to 390m. Cement sector attracted investor interest on the back of investor anticipation of positive growth in cement dispatch numbers for Dec 2016. FCCL and ACPL were top performer. Fertilizer sector extended its gain as the sector gained to close (+1.2%).

Friday was the last trading session of the year 2016 and the stock closed on a positive note gaining 140.31 attaining fresh peak of 47,806.97. Heavy weights blue-chip stocks mainly supported the market mainly UBL, HBL, Engro and Engro Foods with cumulative contribution of 178 points to the index.

PARTICIPANTS/ACTIVITY

On average shares of 406 companies were traded. Of these 219 were gainers and 170 were losers and 17 remained unchanged.

Foreigners were net seller by $17.86m during the week; companies were net buyers $4.12m, Banks were seller $2.10m; Mutual fund net buyer $15.24 and individuals net buyers $11.71m.

Volume leaders during the week were: Bank of Punjab 108m; Dost Steel Mills Ltd 107m; K-Electric 73m; Dewan Cement 69m; Fauji Cement 32m; SNGPL 21; TRG Pakistan 19m; NIB Bank Ltd 18m; Engro Polymer 14m; and IGI Investment 13m.

TRIGGERS
  • Sales numbers for fertilizer for November indicate a month-on-month increase of 112 pc for urea.
  • China to finance Rs107.76 billion loan for the three new road projects under CPEC.
  • Pak Elektron Company has introduced new refrigerator series Desire Glass Door Intello.
  • SBP rejected all the bids made for PIBs three year, five years and ten years tenor.
  • Pak-China have agreed to include Diamer Bhasha Dam into list of power projects under CPEC.
FUTURE OUTLOOK

The upside target for the Index is around 48,140, which can go to 48,962. Downward it could come to 47,425. The RSI and Stochastic Oscillator have moved up supporting a positive view. Any downside can be viewed as an opportunity to buy.

RAEES UDDIN KHAN – Research & Development Institute of Securities Management & Research Karachi

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