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Stock market at a glance

MARKET REVIEW

Bears gained a foothold in the market in the week as the index returned 1.04%WoW to close at 41,635 points level. The participation improved during the week with ADT and ADTV reporting a jump of 24%WoW and 33%WoW respectively. Negative news flow concerning HBL’s money laundering case in USA weighed on the investors’ sentiments and kept them weak. However, news broke on Thursday night that a significantly lower penalty (USD225mn vs USD620mn) had been agreed which supported the market on Friday. Foreign institutional investors remained net seller during the week with an outflow of USD0.3mn.

During the week inflation figure for the month of August were released by PBS where the headline inflation clocked in at 3.41%YoY during Aug’17, in line with our estimates. While country’s total FX reserves reported a 2%WoW jump and clocked in at USD20.4bn.

OCAC also released OMC sales numbers during the week where the industry reported 12%YoY/8%MoM increase in volumetric sales. PSO came out as the biggest winner, reporting volumetric growth of 15%MoM. Finally, OGRA announced new well head gas prices where it confirmed new and higher prices for Sui field, boding positively for PPL.

OUTLOOK

Going forward, we expect the feel good factor to return to the market as HBL is expected to drag the index up after the news was confirmed about a much lower penalty that will be levied on the bank by the US Regulator. Our other top picks include PPL and PSO.

NEWS THIS WEEK

ECONOMIC HIGHLIGHTS & DATA POINTS

Reserves rise by USD386mn | (DAWN):Pakistan’s total liquid foreign exchange reserves amounted to USD20.4bn on Aug 31, up USD386mn or 1.9% from a week ago, the State Bank of Pakistan (SBP) said on Thursday.

August headline inflation soars to 3.41%YoY | (BR): The headline inflation soared to 3.41% for the month of August 2017 over the same month of last fiscal year, according to Pakistan Bureau of Statistics (PBS). The inflation figures released by the PBS Tuesday also noted a 0.19% increase in the cost of commodities in August 2017 over July and 3.16% during July-August 2017 over the same period a year ago.

PKR130.3bn released for uplift projects | (BR): The government has released PKR130.3bn (13%) for different development projects under Public Sector Development Program (PSDP) 2017-18 against the total budgeted allocation of PKR1001bn. According to the latest data released by Ministry of Planning, Development and Reforms, the government has released PKR32bn (10.5%of total budgeted amount) for development projects of various federal ministries against the total budgeted allocation of PKR305.6bn.

SECTOR AND CORPORATE HIGHLIGHTS

Govt begins process for selling stake in Mari Petroleum | (DAWN): The government has decided to resume the process of privatization and divest up to 18.4% of its shareholding in Mari Petroleum Company Limited (MPCL).

NPLs soar to PKR630bn by June-end | (BR): With an increase of about PKR12bn, the Non-Performing Loans (NPLs) of banking industry rose to PKR630bn by the end of June 2017, mainly due to nonpayment of specialized loans. The latest statistics of the State Bank of Pakistan (SBP) revealed that NPLs of banks and DFIs continued to grow, registering an increase of 2% in the first half of (Jan-June) of current calendar year (CY17).

K-Electric to take bids for 1mn ton per year LNG deal | (BR): K-Electric is seeking to buy about 1mn ton of liquefied natural gas (LNG) annually to feed a new power plant and is due to take bids from prospective suppliers on Friday, industry sources said. The Karachi-based power generator is seeking supply for its 900MW, USD1bn Bin Qasim Power Station which will start-up in two phases, in mid-2018 and the end of 2019. The tender highlights the pace at which Pakistan is becoming a major LNG consumer having already closed a string of massive import tenders which it awarded to trading house Gunvor and Italy’s Eni.

OMCs’ sales increased by 10% in August | (BR): The sales of oil marketing companies (OMCs) increased by 10% on month-on-month basis to 2.4mn tons in Aug’17. During the first two months of FY18, the oil sales increased by 4.0% to 4.6mn tons.

Ogra revises wellhead gas prices up to 111% for 47 fields | (The NEWS): The Oil and Gas Regulatory Authority (OGRA) has increased wellhead gas prices up to a mammoth 111% for 47 fields with effect from July 1, 2017, a notification said.

HBL agrees to pay USD225mn fine| (DAWN): Habib Bank Ltd (HBL) has settled out of court with the Department of Financial Services (DFS) of New York State by agreeing to pay a fine of USD225mn against various violations of the state’s regulatory provisions.

Petrol price raised for September| (DAWN): The government on Thursday increased the price of petrol by PKR2/litre, however, the rates of other petroleum products remained unchanged for September.

STOCK MARKET SYNOPSIS
LAST WEEK
THIS WEEK
% CHANGE
Mkt. Cap (US $ bn)
82.1
82.5
0.6%
Avg. Dly T/O (mn. shares)
109.0
135.9
24.7%
Avg. Dly T/O (US$ mn.)
57.4
76.3
32.9%
No. of Trading Sessions
4.0
4.0
0.0
KSE 100 Index
41,207.0
41,401.0
0.5%
KSE ALL Share Index
29,519.5
29,753.3
0.8%

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