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Stock market at a glance

MARKET REVIEW

The week started off on a bearish note with index declining by 3.4%WoW to close at 45,288pts. Anxiety over domestic politics heightened as ousted PM kicked off a populist march while another prominent leader announced to hold sit in and rallies. The activity in local bourse remained dull amidst political noise as evident from a decrease of 46%WoW and 42%WoW in ADT and ADTV respectively. Foreigners remained net sellers during the week with a net FIPI outflow of USD31.16mn.

During the week, BOD of KEL approved development of 900MW (450MWx2) RLNG based combined cycle power plant. Also, KAPCO announced its intention to buy strategic stake in HUBC of 17.37%.

On the macro front, total liquid foreign reserves plunged by USD279mn to stand at USD20bn owing to external debt repayment. Trade deficit widened by 55%YoY in Jul’17 to USD3.2bn as hefty import bill outpaced meager growth in exports. However, worker’s remittancesincreased by 16%YoY in Jul’17 to USD1.54bn which contained CAD somewhat.

OUTLOOK

We expect market to remain under pressure in the backdrop of political noise where development on political front will continue to dominate investor sentiments.

NEWS THIS WEEK

ECONOMIC HIGHLIGHTS & DATA POINTS

Pakistan’s reclassification may increase money inflow to the country | (Tribune): Index provider Morgan Stanley Capital International’s (MSCI) recent reclassification of Pakistan to emerging markets from frontier markets status is expected to prompt money to flow into the country, a major American financial newspaper reported.

Rebasing of inflation likely before next budget | (The Nation): The rebasing of inflation indices is likely to be completed by Jun’18 as the Pakistan Bureau of Statistics (PBS) has already initiated the process to accomplish it as soon as possible.

July Fiscal Year 2018: inflows of workers’ remittances up 16% | (BR): Inflows of workers” remittances, sent by overseas Pakistanis, posted a healthy increase of 16% during Jul’17. According to State Bank of Pakistan (SBP), overseas Pakistani workers remitted USD1.54 bn in the Jul’17 as compared with USD1.33bn sent during the same period last year, depicting an increase of USD214mn.

Forex reserves plunge | (BR): The country’s total liquid foreign exchange reserves fell sharply by USD279mn during the last week owing to external debt payment. According to State Bank of Pakistan (SBP), the country’s total foreign exchange reserves stood at USD20bn as on August 4, 2017 compared to USD20.28bn on July 28, 2017. The decrease in reserves was on account of external debt servicing and other official payments.

Trade deficit widens | (BR): Pakistan’s trade deficit has increased to USD3.204bn in Jul’17, up by 55.46% over USD2.06bn for the same month a year ago. Provisional trade data released by the PBS for the month of Jul’17 noted 10.58% increase in export and 36.74% in imports during the month under review. Exports have increased to USD1.63bn in Jul’17 from USD1.48bn for the same month a year before and imports to USD4.84bn from USD3.54bn.

SECTOR AND CORPORATE HIGHLIGHTS

Cement sales hit record high in July as local demand escalates | (The NEWS): Cement industry recorded an all-time high single month sales in July as the commodity’s sales and exports grew 44 percent year-on-year to 3.38mntons during the month owing to an impressive demand in the domestic market.

Circular debt touches PKR800bn: Pepco | (DAWN): The power sector has resumed building circular debt after an initial freeze that came about following a historic dip in international oil prices, improvement in bill collection and slight reduction in system losses.

SSGC seeks government guarantees for bank loans | (Tribune): Sui Southern Gas Company (SSGC) has sought guarantees of the federal government for bank loans of billions of rupees it needs for setting up 30 liquefied petroleum gas (LPG) air-mix plants in remote areas of Sindh and Balochistan.

Arif Habib to set-up power plant with Chinese funding| (Tribune): Pakistan is set to attract more Chinese investment for setting up another Thar coal-fired power plant as the country seeks to aggressively utilize indigenous energy resource to reduce its reliance on imported fuels.

Government to seek PKR55bn loan to retire circular debt | (Tribune): As the circular debt piles up to PKR400bn ,the government plans to borrow on other PKR55bn from commercial banks to retire dues of the Pakistan State Oil and independent power producers.

STOCK MARKET SYNOPSIS
LAST WEEK
THIS WEEK
% CHANGE
Mkt. Cap (US $ bn)
92.1
89.4
-2.9%
Avg. Dly T/O (mn. shares)
348.9
189.9
-45.6%
Avg. Dly T/O (US$ mn.)
157.1
91.5
-41.8%
No. of Trading Sessions
5.0
5.0
0.0
KSE 100 Index
46,877.4
45,288.5
-3.4%
KSE ALL Share Index
33,038.8
32,079.7
-2.9%

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