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EQUITIES FALL IN THIN TRADE AMID POLITICAL UNCERTAINTY

SUMMARY

The market continued on a downward trend as investors maintained a wait-and-see approach ahead of the much awaited Panama case verdict during the week. There was a drastic cut in volume of trading as the average of the week came down to 155.74 million from 248.64 million last week, a cut of 37% WoW. During the week, the major fall recorded in banks and fertilizer, which came down -2.7%. Cement had a rise of 0.4% and E&P up 2.5%. Notable feature was foreign investors registering a net buying of $9.3 million compared to net selling of $19.1 million. The KSE-100 Index shed 267 points to close at 47,889.37 points.

After closing on a positive note of gain of 207 points , the market maintained a mixed posture on Monday when KSE-100 Index moved between 48,384.56 the intra- day high to 48,122.48 low , finally settling at 48,227.75 after gaining 71.82 points .The trading volume dropped from 273.53 million last Friday to 159.93 on Monday .There was mixed sentiment in banking sector where it remained under pressure in the initial hours of trading but recovered on the back of the news of CPI clocking 4.94% in March when it was 4.22% in February. Auto sector saw some interest with Indus Motors hitting the upper cap and HCAR gaining 3.8pc on market reports of expansion plans of the former and highest-ever sales achieved by the later.

The Index was affected on Tuesday by the uncertainty over the Panamagate case verdict. Investors seem awaiting for the political situation to unfold before taking fresh position. The investors went for profit-taking in the second half session to close 48,088.37 shedding 139.38 points. Sindh High Court sanctioned the merger of Byco Oil and Byco Terminal with Byco Petroleum Pakistan. Byco Petroleum hit its upper limit and also remained volume leader with 15m shares.

On Wednesday, the KSE-100 Index took a hit after terror incidents in the country raised investor’s concern. Banking sector led the decline as sector lost 2.6%. HBL -2.08%, MCB -1.52% and NBP -5%. The index shed 511.06 points to close at 47,577.31.

The KSE -100 Index closes on Thursday at three month low. The Index recorded a decline of 220.71 points to close at 47,356.60. Despite pressure in the market, the exploration and production sector managed to close positive as crude oil prices surged. Over all trading volume declined to 146.3 million from 185.5 million on Wednesday.

On last day Friday, the market broke its bearish streak and gained 532.77 points to close at 47,889.37. Banking and E&P sector led the gains as US air strike on Syrian base raised the crude oil prices. SSGC gained on the news that company’s Board of Directors has in principle approved a capital intensive project worth Rs65 billion.

PARTICIPANTS/ACTIVITY

On average shares of 373 companies were traded. Of these 137 were gainers and 216 were losers and 20 remained unchanged.

Foreigners were net buyer by $9.28m during the week; companies were net buyers $11.05, Banks were seller $16.8m; Mutual fund net buyer $5.63m and Individuals net seller $4.29m.

Volume leaders during the week were: Azgard Nine 58m; Aisha Steel Mills Ltd 46m; Bank of Punjab 37m; TRG Pakistan Ltd 35m; Byco Petroleum 34m; Dewan Cement 21m; K-Electric and Sui Southern Gas 8m each; Fauji Fertilizer and Engro Fertilizer 5m each.

TRIGGERS

– Indus Motors plan $40m investment to boost capacity expansion to help create up to 4,400 jobs.
– CPI inflation increased to 4.94% in March.
– Total sales for HCAR in March FY17 stood at 35,300 units which is the highest ever sales figures for the company.

FUTURE OUTLOOK

Investors wait and see attitude on Panamagate verdict suggests a cautious approach to be adopted as the decision once comes out will set the direction for the market.

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

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