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PSX closes the year 2017 on bullish note as KSE-100 index up over 1000 points
Summary

Just at the close of 2017, Pakistan Stock Exchange (PSX) stayed bullish during all the four days of trading of the last week of the year. The market, which was trailing at 39,000 level preceding week crossed the barrier and entered into 40,000 level this week to close at 40,471.48, a jump of 1000.59 points during the week. The average volume too increased to 214.52m from 138.18m. The market capitalization too increased to Rs8.571 trillion from Rs8.359 trillion in the previous week.

The outgoing week marks the end of worst year in terms of market performance since 2008 with KSE-100 Index plunged by 15%. The KSE-100 Index was down 24% from its intraday peak of 53,127 recorded on May 25, 2017.

Euphoria in the trading during the week could be attributed to the appointment of new finance team with heavy agenda. On Tuesday government appointed Miftah Ismail as Advisor to Prime Minister on Finance, Revenue and Economic Affairs with status of Federal Minister while Rana Mohammad Afzal took oath as State Minister for Revenue, Finance and Economic Affairs. The team is clearly given to work on three-point agenda i.e. broaden the tax base, quicken refund payment to exporters and bring undocumented money into mainstream.

The week ended was also the rollover week and also December closing for mutual funds and banks.

The stock market opened on Tuesday after an extended weekend, as the market was closed on Monday due to Quaid-e-Azam birth anniversary, with gain of 54.86 points to close at 39,525.75. Steel sector was in the limelight as investors learned that the recently announced regulatory duty on import of hot-rolled coil is yet to be approved PSX announced International Industries and International Steels addition to the KMI-30 index.

On Wednesday, KSE-100 Index surges 620.98 points on the appointment of the new finance team after a long delay. The market closed at 40,146.73.

Stocks continued rising on sixth day in a row with addition of 224.58 points to close at 40,371.31. The investors seemed to get comfort with the new appointment with clear direction of action and decrease in the noise on the political front and the stalled depreciation of the rupee.

The last trading day the market continued its journey upward with a gain of 100.17 points to close 40,471.48.

 

Participants/Activity

On average shares of 355 companies were traded. Of these 200 were gainers and 139 were losers and 16 remained unchanged.

Foreigners were net buyer of $8.94m during the week; companies were net buyer $8.63m, Banks were seller $16.04m; Mutual fund net buyer $11.47m and individuals net seller $4.96m.

Volume leaders during the week were: World Call Telecom 79m; TRG Pakistan 44m; K-Electric Ltd 34m; PTCL 25m; Dost Steels Ltd 19m; Lotte Chemical 17m; Pak Elektron 16m; Fauji Cement 15m; Dewan Cement 13m; Dewan Salman 11m; Bank Al Falah 10m; Bank of Punjab 9m and Aisha Steel Mills 7m.

Triggers:

– Government tightening restrictions on import of furnace oil.
– Minister of State hints at further borrowing, auction of bonds.
– Profit repatriation by foreign firms jumps by 29 percent.
– Indus Motors increases prices with immediate effect.
– OGDCL discovery at Dhok Hussain.

Conclusions

The RSI and the MACD heading upwards supporting a positive view. The upward seem to be at 41,046 and downward support at 30 DMA stands at 39,581.

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

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