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KSE-100 INDEX RECOVERS ON POLITICAL CLARITY, GAINED 2.1% WOW
SUMMARY

The disqualification of PM last week Friday led the market to a clear direction as it gained 618 points on Last Friday. The present week saw positivity in the market for four days as there were decisions made in the Parliament for the election of new PM from the same party PML(N) and the formation of the new government. This led to confidence of investors on the political front as it gained 1122.31 point on the first four days of week. The investors on Last day of the week Friday opted to take profit and the KSE-100 index shed 206.97 point to gain 915.34 point during the week.

Monday started on a bullish mode when there was 1,200-point surge in the market and the index reached to 47,111 at a point of time to celebrated the end of the political stalemate.. This level however could not be sustained and it closed at the end of Monday at 46,010.45, a gain of 98.42 The foreigners were seller by $17.80 while Mutual Funds and Individuals were buyers of $10.7m and $12.80 m respectively.

The bullish trend continued on Tuesday and the KSE-100 index gained 522.98 points to close at 46,533.43. Selective buying in steel ,oil, financial and cement helped maintain bullish momentum .

The fourth session of the week starting last Friday saw the stock market continued to advance on Wednesday and ends few points shy of 47,000 mark at 46,949.04 a gain of 415.61 . Financial stocks lent most of the support as HBL bounced back (+2.9%) led the gains after dropping over 8% in the previous two sessions. Cement stocks also attracted interest and traded higher with Lucky Cement (+2.8%) and DG Khan Cement (+1.6%)

Blue chips on Thursday led the rally and the KSE-100 crossed 47,000 mark to close at 47,-84.39 ,a gain of 135.30 Bata Pak and Murree Brewery were the top gainers with Rs.98.99 and Rs.27 respectively to close at Rs.3,199 and Rs.775. Philip Morris Pak and Pak Tobacco were the top losers.

On Friday the stocks snap five-day winning and the investors decided to opt for profit taking. The Mutual Fund and Individuals were net buyers during the week of $34.87m and $17.88 m . The KSE-100 index lost 206.97 to close at 46,877.37

PARTICIPANTS /ACTIVITY

On average shares of 401 companies were traded . Of these 250 were gainers and 133 were losers and 18 remained unchanged.

Foreigners were net seller of $40.99m during the week ;companies were net buyer $3.97m, Banks were seller $6.22 m ; Mutual fund net buyers $34.87m and individuals net buyer $17.88

Volume leaders during the week were: Azgard Nine 114m; K-Electric Ltd 110m; B.O.P 109m; TRG Pak Ltd 96 m; Aisha Steel 74 m; Hum Network 24 m; Lotte Chemical 36m; Sui Southern Gas 18 m; and Dost Steel Ltd 14 m

TRIGGERS

_ New PM and ministries, divisions created for speedy implementation of economic policies.

-Cement despatches grow 45 pc in July .

-Inflation for the combined income group witnessed a nominal increase of 0.02 pc for the week ended on Aug 3 over the preceding week.

_ Pakistan’s total liquid foreign exchange reserves amounted to $20.28 billion on July28 d0own $153.1 million .

-Inflation measured thru CPI dipped 2.9 pc for the first month of present fiscal year.

-Lucky Cement profit grows to Rs.13.7 bn for the year ended June 30, 2016-17

CONCLUSIONS

Over all activity in the market has improved and the average traded volume improved to 348 m . The clarity has emerged on political front with the transfer of power to new PM and continuation of same policies. Local mutual funds showed net buying of $34.87 m while foreigners were net seller of $40.99m . KSE-100 index during the week crossed 47,000 marks free to move upward.

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

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