The market pared some of the losses of the last week and returned 2% on the last week’s closing to close at 49,527 points. Market participation remained thin as ADT and ADTV both posted a decline of 19% and 53% respectively. Foreign investors were net buyers during the first four days of the week with net FIPI clocking in at USD6.5mn.
Lack of foreign participation comes on the back of i) negative developments in the budget and ii) new headwinds on the currency front, especially in the wake of massive debt servicing, proved to be major dampeners for foreign investors. In this regard, country’s foreign exchange reserves posted a decline of USD1.2bn during the week as the country retired its major foreign currency denominated loan.
The market participation is likely to remain thin in the coming week as we approach the festive period. The direction is however expected to be negative as concerns arise on the sustainability of the current exchange rate.
NEWS THIS WEEK
ECONOMIC INDICATORS & DATA POINTS
Foreign reserves decrease by USD1.215bn (Nation): During the week ending June 2, 2017 SBP’s reserves decreased by USD1.215bn to USD15.707 bn due to debt servicing.
Govt to cut power tariff by PKR 2/unit for industrial sector (The News): Government is going to slash down the electricity tariff for the industrial sector by PKR 2/unit to PKR 9 /unit.
SECTOR AND CORPORATE HIGHLIGHTS
Lifting ban on imported fuel projects (Recorder): Government is considering lifting the ban on imported fuel, notably coal, projects.
PKR2bn subsidy marked for tractor purchase (Tribune): Sindh government has put aside PKR2bn in subsidy for farmers on tractor purchase.
IPPs accused of ‘blackmailing’ government (Recorder): Ministry of Water and Power has accused IPPs of blackmailing the government under the garb of overdue receivables at a time it is trying to ensure power supply during Ramazan.
Cement price shoots up by PKR 55 per bag (Tribune): The price of cement has been increased by PKR 55 per bag even though the effective date of increase in FED in the proposed Finance Bill 2017-18 is July 1, 2017.
STOCK MARKET SYNOPSIS
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KSE 100 Index
KSE ALL Share Index