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KSE-100 INDEX ENDS LOSING STREAK BEFORE LONG HOLIDAYS AMID FOREIGN INVESTORS INTEREST

SUMMARY

It was a short four-day week for stock exchange with a long Eidul Fitr holidays as Friday remained closed due to Jumma tul Wida.

During the week early two days saw the market shedding 1,944 points while profit-taking was seen on the last two days to finally settle the KSE-100 Index at 46,332.31 points by losing 526.25 points, which is 1.12% WoW.

The late recovery in the stock exchange came through institutional buying and foreign investors who closed the week with buying of $9.19 million. They were the net buyers during the last three days. The average volume too increased to 277 million shares while market capitalization improved to Rs9.417 trillion.

The stock market extended its losses on Monday as it continued to fall for the fourth consecutive session. It started on positive note gaining almost 215 points .Later the Index went down by 540 points to finally close 265.22 points to 46,593.34. The positivity in the market came on news of SECP allowing brokers to fund share purchases. It followed with negative news of SBP advising federal government to make it mandatory for project developers to arrange financing from abroad.

Tuesday saw the panic selling to bring KSE-100 Index below 45,000 to close at 44,914.45 a loss of 1,678.89 points. The market started positively for first hour went for downward slide due to Panama Papers case uncertainty. After news claiming Trump administration hardened stance towards Pakistan local MF’s selling $7.81 upon redemption ahead of the closing of fiscal year.

The stock market managed to break the five-day losing spell on Wednesday. The benchmark KSE-100 Index increased by 560.01 points to close at 45,474.46. The foreigners were net buyers of $9.52 million shares. It was a volatile day for stock market, negative 1,088 points and plus 851 point.

Equities extended their gain on Thursday. KSE-100 Index increased by 857.85 points and closed at 46,332.31. Foreign investors were net buyers of shares worth $1.75 million.

PARTICIPANTS/ACTIVITY

On average shares of 375 companies were traded. Of these 146 were gainers and 208 were losers and 21 remained unchanged.

Foreigners were net buyers $9.19 million during the week; companies were net buyer $5.76 million, Banks were buyer $10.59m; Mutual fund net seller $12.24m and individuals net seller $24.78m.

Volume leaders during the week were: K-Electric $124m; B.O.P (R) $93m; TRG Pak Ltd $50m; B.O. P $30m; Engro Polymer $23m; Askari Bank $17m; World Call $15m; Byco Petroleum $10m; Bank Al Falah $9m and Avanceon $7m.

TRIGGERS

– The current account deficit jumped to almost $9 billion in the first 11 months of 2016-17.
– National Tariff Commission (NTC) imposed anti-dumping duty of 24.04 per cent on (CC) steel billets imported from China for a period of 5 years.
– Pakistan total liquid foreign exchange reserves to $20.3 billion on June 16, one per cent up from previous week.
– FDI amounted to more than $2 billion in July-May up 22.6 per cent from a year ago.
– Textile, clothing exports dropped to $11.234 billion (1.98 % decline) in July-May.
– Ministerial body advises more sugar export of 0.6 million tons.
– SBP revises rules on all new outsourcing arrangements by financial institution.

CONCLUSIONS

Technically the Index have extended gains from the previous session and tested resistance 46,486. The next resistance is 46,823. Fundamentally market would be guided by multiple factors like foreign institutional flows, global crude performance while politics of Panama Papers case will remain a drag for the Index.

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

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