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RECOVERY WITNESSED ON MUTUAL FUNDS BUYING AS KSE-100 INDEX GAINS 372 POINTS
SUMMARY

SECP notification of relaxation the minimum 5 percent cash restriction for Asset Management Companies took positively by investors as Mutual Funds total buying during the week climbed to $17.32m. The KSE-100 Index remained positive for three days while it profit-taking recorded on the remaining two days. The Index over all gained 372 points to close on Friday at 41,435.70. The volume declined to average 114m and market capitalization increased to Rs.8.493 trillion.

The news which made impact on the PSX were: In Saudi Arabia the leadership attempted a high profile corruption purge that pushed up global crude prices; the government released Rs.14 billion for the implementation of phase-1 of the Prime Minister’s Export Incentive package; Chinese delegation has expressed its interest in pursuing joint venture with Pakistan in the auto parts and accessories sector and material information was released by POL regarding new discovery of hydro carbon at Makori East-06. On the political side news of Nawaz Sharif appearance in court and Supreme Court reply to the review petition made waves in the market.

The stock on Monday closed marginally red despite rise in crude prices. The Index shed 33.23 points to close at 41,030.77. The volume remained the lowest to 75.430m.

The effect of high oil prices was seen on Tuesday as the Index gained 18.45 points to close at 41,049.22. Pakistan Oilfields (POL)N +1.1%) led gains in the sector after it emerged as the biggest beneficiary of a hydrocarbon discovery announced during the day.

Retail investors and foreign buyers provided much needed relief for the market on Wednesday. The Index gained 209.94 points to close at 41,259.16.

The latest regulatory change for cash requirement by SECP on Thursday raised hopes of increased cash and stock advanced by 531 points to close at 41,790.16.

After three days of bullish trend, the stock took for profit and lost 354 points to close at 41,435.70.

PARTICIPANTS /ACTIVITY

On average shares of 365 companies were traded. Of these 174 were gainers and 170 were losers and 21 remained unchanged.

Foreigners were net seller of $1.82m during the week; companies were net buyers $1.00m, Banks were buyers $0.54m; Mutual Funds net buyer $6.89m and individuals net seller $1.99m.

Volume leaders during the week were: Sui Southern Gas 40m; Japan Power 33m;Azgard Nine 25m; Dost Sui Northern Gas 15m; TRG Pakistan Ltd 12m; K-Electric 11m; Bank of Punjab, Bank Alfalah, Pak Elektron and Aisha Steel Mills 9m each; Engro Polymer XD 7m and PTCL 7m.

TRIGGERS:
  • World Bank projected GDP growth at 5.5% for FY18 & inflation 6%.
  • Construction of 430 km Lahore-Peshawar oil pipe lines.
  • 27.9% YoY increase in Oct 2017 remittances.
CONCLUSIONS

On Thursday the Index has closed above 50 DMA & could restrict down side to 41,465 followed by 30 DMA 40,998. The RSI and MACD breaking up and supporting positive view.

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

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