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Stock market at a glance

MARKET REVIEW

The eagerly anticipated inclusion of Pakistan in MSCI-EM materialized in the week however, the more than anticipated foreign selling weighed in on the investor sentiment with KSE-100 losing 7.8%WoW, closing at 48,555 points level. Market activity however, picked up significantly with ATDV surging 24.6%WoW, respectively. Foreigners remained aggressive sellers in the first four days of the week with a net FIPI outflow of USD126mn where the gross FIPI activity increased around 4x. The selling was primarily concentrated in Banks and Cements.

The market also factored in the negatives of the Budget’18 for capital markets, where capital gain tax and dividend tax were increased. Also, Pakistan Bureau of Statistics released monthly inflation numbers for the month of May’17 clocking in at 5.02% where 11MFY17 average inflation settled at 4.18%.

OUTLOOK

Though intense foreign selling dampened the market sentiment, strong fundamentals and increased attractiveness following XX% correction in multiple continues to back market strength. Thus we believe the market may gain traction as foreign selling subsides and active EM funds begin to participate.

NEWS THIS WEEK

ECONOMIC INDICATORS & DATA POINTS

Inflation edges up to reach 5.02% in May (Recorder): CPI inflation for the month of May increased to 5.02%, core inflation was recorder at 5.5%.

Power consumers to get a refund of PKR1.96 per unit this month (Dawn): Nepra has directed all distribution companies of Wapda to refund PKR1.96 per unit to consumers this month.

SECTOR AND CORPORATE HIGHLIGHTS

Construction to become costlier (Dawn): Budgetary measures announced by the government will jack up cement price by PKR18/bag and steel bar by PKR2,000-3,000/ton.

PM orders audit of circular debt claims (Dawn): Prime Minister has ordered a special audit of fresh circular debt and third-party analysis of the power demand-and-supply situation.

LHC dismisses petition against anti-dumping duty (Tribune): LHC has dismissed numerous petitions filed by commercial importers against the anti-dumping duty on different steel products.

Nishat to decide which car to produce first (Tribune): Nishat group is conducting consumer surveys in order to decide whether to start with 800cc or 1,000cc engine category.

STOCK MARKET SYNOPSIS
LAST WEEK
THIS WEEK
% CHANGE
Mkt. Cap (US$bn)
99.3
92.5
-6.8%
Avg. Dly T/O (mn. shares)
402.3
294.8
-26.7%
Avg. Dly T/O (US$ mn.)
192.7
240.1
24.6%
No. of Trading Sessions
5.0
5.0
0.0
KSE 100 Index
52,636.9
48,555.3
-7.8%
KSE ALL Share Index
36,130.3
33,693.6
-6.7%

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