The Index continued its downward trend during the week. After starting on a positive note the index lost its steam on political noise. Index closed the week at 47,577pts, down by 0.7%WoW. FIPI registered net outflow of US$2.8mn. Average volume traded increased by 9.7%WoW while average value traded increased by 8.9%WoW.
During the week, data released by Pakistan Automobile Manufacturers Association (PAMA) depicted 17%YoY growth in sales volume during Mar’17. PSMC was the outperformer of the month with sales increasing by 19%YoYand Wagon R remaining the prime contributor to growth. Additionally, PM approved ending moratorium on fresh gas connections. Furthermore, during the week government decided to divest 18.3% stake in Mari Petroleum Company Ltd at the stock market after the two joint venture partners refused to buy the shares at a price approved by the Cabinet Committee on Privatization. In addition, NBP conducted its analyst briefing, where the management discussed the overall strategy of the bank going forward and also gave update on the ongoing case of employee pension plan.
On the macro front, Remittances decreased by 2.3%YoY during 9MFY17 to USD14bn. Country’s trade deficit widened as gap between imports and exports stood at USD23.38bn in 9MFY17, up 38.8% YoY. Furthermore, China approved additional financing for infrastructure projects in Pakistan under CPEC, taking total investment volume to USD62bn.
Going forward, political development including Panama papers verdict and upcoming quarterly results can be expected to provide direction to the market. Furthermore, activity from foreigners can be expected to remain lackluster on account of Easter holidays. Our top picks are PPL, OGDC, BAHL, HBL, EFERT, PSO, PIOC, MUGHAL and DGKC.
NEWS THIS WEEK
ECONOMIC INDICATORS & DATA POINTS
RESERVES INCREASE USD193MN (DAWN): Pakistan’s liquid foreign exchange reserves increased by USD193.6mn toUSD21.7bn.
SERVICES EXPORT DOWN 2.98% IN 7MFY17 (DAWN):Services export in 9MFY17 declined by 2.98%YoY to USD3.52bn, while import of services went up by 1.35%YoY to USD5.51bn.
ECNEC APPROVES OVER PKR275BN PROJECTS (RECORDER): ECNEC has approved over PKR275bn projects for energy, water, transport and communication sectors.
CPEC INVESTMENTS INCREASED TO USD62BN (TRIBUNE): China has approved additional financing for infrastructure projects in Pakistan under CPEC, taking total investment volume to USD62bn.
PAKISTAN’S TRADE DEFICIT WIDENS TO HISTORIC LEVEL (TRIBUNE): Gap between imports and exports stood at USD23.38bn in 9MFY17 period of current fiscal year, up 38.8% YoY.
REMITTANCES DECREASE 2.3% YOY (DAWN): Pakistan received USD14bn remittances in 9MFY17 down 2.3% YoY. The country received USD4.1bn in July-March from Saudi Arabia, down 6.2% YoY.
SECTOR AND CORPORATE HIGHLIGHTS
969MWNEELUM-JHELUM HYDROPOWER PROJECT HEADING TOWARDS COMPLETION (TRIBUNE): Wapda chairman has said that 92% work on Neelum-Jhelum hydropower project has been completed and the project is heading towards completion.
GOVT DECIDES TO DIVEST 18.3% STAKE IN MARI PETROLEUM (TRIBUNE): Government has decided to divest 18.3% stake in Mari Petroleum Company Ltd at the stock market after the two joint venture partners refused to buy these shares at a price approved by the Cabinet Committee on Privatization.
CAR SALES EDGE UP 1.7% YOY (DAWN): Sales of cars produced locally edged up 1.7% YoY to 139,570 units in 9MFY17. A plunge in Suzuki Bolan after the end of Punjab Rozgar Scheme was largely compensated by buoyant sales of Honda City and Civic.
SUGAR EXPORT LINKED TO PAYMENT TO FARMERS (DAWN): SBP has said that no sugar mill can export sugar unless it has cleared outstanding dues of farmers up to the last season and has started crushing at full capacity.
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