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KSE-100 index ends over 39,000 as Pak rupee adjustment news push investor sentiments
Summary

During the week, the market remained depressed for three days as it touched 38,000 level on Thursday to close at 38,784.66 points after losing 1,123 points. The next day on Friday the news of State Bank of Pakistan (SBP) would let the currency exchange rate to adjust to market conditions after meeting with IMF on Friday. This led the currency rate to touch Rs110 before settling down at around Rs107. The market gained 295.74 points to close at 39,080 on Friday. The other fundamentals, which build up the investor sentiments during the week was the publication of Model Town Report and planning of sit-in incoming day; US recognizes Jerusalem as Israel’s capital; CPI number closes 3.97%; PSMC news that company is introducing four new products; Japan power to declare that the company would appeal an earlier winding up petition and Sui Southern Gas news of a revised tariff proposed by the regulator.

Over all the PSX Index declined by 930 points. The average volume was 141 million and market capitalization declined by Rs54 billion to close at Rs8,321 trillion. The foreigners were net buyer by $1.03m.

A dull session prevailed at PSX on Monday. In the absence of any negative news the Index managed to close third consecutive session in green. PSX Index gained 39.45 points to close at 40,049.81 points. The volume shrank by 47 percent to 96.654 million compared to 180.780 last Friday.

The market on Tuesday was affected by the Lahore High Court news of ordering Punjab Government to make 2014 Model Town incident judicial inquiry report public. PSX shed 104.40 points to close at 39,945.41.

On Wednesday dull trading continued and KSE-100 Index fall by 39.09 points to close at 39,907.32. The uncertainties on the political front push the investors cautious. The Index remained range bound with high of +117 points against a low of -120 points.

Stock plunged 1,122.66 points on Thursday. President Donald Trump recognized Jerusalem as the capital of Israel which created fear of further political turbulence in the Middle East. The determination of cleric Muhammad Tahir-ul-Qadri of protest against the government over the Model Town incident report also had impact in the market as it reached 38,000 to close at 38,784.66 points.

On last day on Friday the investors took the news of devaluation of PKR/USD as positive. The KSE-100 Index shot up 550 points as news of the devaluation of Pakistani rupee declining 4% in intra-day movement boost the index by 295.74 to close at 39,080.00.

 

Participants/Activity

On average shares of 357 companies were traded. Of these 149 were gainers and 191 were losers and 17 remained unchanged.

Foreigners were net buyer of $1.03m during the week; companies were net buyer $5.06m, Banks were buyers $4.23m; Mutual fund net seller $3.41m and individuals net seller $9.72m.

Volume leaders during the week were: World Call Telecom 70m; K-Electric Ltd 53m; TRG Pakistan Ltd 48m; Japan Power 31m; Bank of Punjab 17m; Azgard Nine 16m; Sui Southern Gas 11m; Dewan Cement 10 m; Sui Northern Gas 9m; Pak Elektron 10m; Dewan Motors 7m and Dost Steel Mills Ltd 5m.

Triggers:
  • Cement sales number (+5.2% YoY ) in Nov.2017
  • Suspension of Furnace oil (FO) import by PSO
  • CPI inflation number (+3.97% YoY in Nov.-2017)
Conclusions

Technically the index has formed a lower high and low indicates for further downside. It could go to 38,682 and could further slide to 38,139.

Raees Uddin Khan
Research & Development, Institute of Securities Management Research & Training (Pvt) Ltd,
Karachi.
Dated: December 9, 2017

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