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PSX CLOSES IN RED AFTER THREE DAYS OF POSITIVE RUN

SUMMARY

The investors in stock exchange were expecting the decision on Panamagate case this week. This kept the market in an uncertain mood and the investors were cautious till the last session on Friday as nobody knows anything about the decision. The turn of the socio-politics will take after the decision and the effect it will have on the economy of Pakistan.

Another news of the SECPs’ crackdown over in house badla financing continued to haunt investor during the week. Brokers panicked after the SECP took action against in-house financing.

The positive development during the week was PSX commenced distributing among its 200 stockbrokers their share in the proceeds of Rs8.96 billion received from the consortium of Chinese investors for the 40 per cent stake in the bourse last week. This provided liquidity in the market.

Over all activity in PSX remained lower with average volume declining to 238 million shares and market capital to Rs9.762 trillion.

PSX opened on a positive note on Monday but at the end selling pressure developed as investors opted to take profit. The index closed at 49,434.89 points losing 188.92 points. The foreigners, however, were net buyers of $5.1 million shares.

On Tuesday in the absence of any trigger the index ends marginally positive gaining 17.82 points to close at 49,452.71 interest was seen in SNGP and SSGC late in the session with stocks gaining 3.7% and 0.9% respectively.

KSE-100 gained 302.01 points on Wednesday as Banking sector led the rally. MCB (up 0.78 5) and UBL (up 0.47%) gained to close in the green zone. Stocks closed sharply higher led by oil, fertilizer and engineering sector on strong earnings outlook. The index closed at 49,754.72.

The falling global oil prices on Thursday has its affect on the stock exchange. The KSE-100 index shed 362.28 points to close at 49,392.44 points. OGDC fell 2.3pc,Pakistan State oil 2.5pc, Sui Northern Gas pipelines 4.3 pc, Pakistan Petroleum 1.5pc and Pakistan Oilfields 2pc together they brought index down by 386 points.

Activity remained lackluster on Friday as the index traded between an intraday high of +64 points and low of -343 points to finally close at 49,191.75 losing 200.69 points. Volume too declined to 183 million shares.

PARTICIPANTS/ACTIVITY

On average shares of 388 companies were traded. Of these 136 were gainers and 235 were losers and 17 remained unchanged.

Foreigners were net buyer by $15.50m during the week ;companies were net buyers $4.34m, Banks were seller $3.29m; Mutual fund net buyer $9.27m and individuals net seller $23.52m.

Volume leaders during the week were:

Azgard Nine 77m; Lotte Chemical 76m; K-Electric 74m; Silk Bank 59m; Sui Northern Gas 30m; World Call 21m; Aisha Steel 15m; Pak Refinery, TPL Trakker Ltd and Bank of Punjab 12m each; Pak Elektron and Byco Petroleum 10m each and TRG Pakistan 8m.

TRIGGERS

– Fauji Fertilizer Bin Qasim remained the top performer gaining 5.2 % during the week on rumors of possible increase in local DAP price while overall sector remained jitter following mixed news flow on delay in reimbursement of subsidy claim and weak offtake during Feb.’17.

– Foreign Exchange reserve rise by 1.5 pc to $22.1 bn.

– Hascol planning to expand operations in Baluchistan.

– PTC China Telecom Global signing MOU to establish optical fiber network.

– PSX proposing IPO of its share & listing thereof on PSX.

– Brokers started receiving PSX sale proceeds of Rs.8.96 million.

FUTURE OUTLOOK

The Stochastic Oscillator and the RSI have shown weakness suggesting a negative trend. The Panamagate case may affect the market.

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

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