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KSE-100 index ends week down but positive momentum ahead
Summary

During the weekend the KSE-100 Index declined by 250 points to close at 44,301.20. The last two sessions saw the increase in Index by 252 points giving a positive momentum ahead. The average volume was down to 255 million share while market capitalization declined to Rs.9.171 trillion. Fundamental news, which had impact on the stock market include the rise in policy interest rate by SBP; notification of an increase in prices along all categories of medicines after approval from the federal cabinet; CPI inflation reading for January at 4.42%; announcement of Senate elections on March 3, paving way for timely conduct of general election.

The week started with the hike of interest rate. Banks reacted negatively to the monetary policy event as increase in rates will increase the borrowing cost. The Index shed 93.83 points to close at 44,457.30. Sector contributing to day’s performance included commercial bank up 252 points, while cement was down 120 points.

The KSE-100 Index closed negative for the fourth successive session with heavyweight financial and cement sector leading losses on Tuesday. Pharmaceuticals were among the top gainers of an increase in prices of medicines. The Index shed 224.19 points to close at 44,233.11.

The KSE-100 Index retreated further 184 points on Wednesday finishing the day close at 44,049.05. Investors took profit in heavy weight oil and gas sector to the decline in WTI price per barrel to $64 from $65 a day earlier. Engro Polymer closed positive as the company announced an unexpected dividend without any declaration of right share.

Stocks gain 206 points after five-day losing streak. It closed 44,255.48. The buying interest of investors focused on the cement sector. As provisional sales numbers for January were expected to show 14 percent one-year growth.

Stocks gained 45.72 points on last day of the week. The Index gathered momentum during the first session with the intra-day high seen at 382 points. The foreign exchange reserves fell by $299 million while SC took suo motu notice against PML-N leaders due to their anti judiciary remarks. The Index finally closed at 44,301.20.

Participants/Activity

On average shares of 376 companies were traded. Of these 184 were gainers and 173 were losers and 19 remained unchanged.

Foreigners were net seller of $12.62m during the week; companies were buyer by $0.84m. Banks were seller $12.08m; Mutual fund net buyer $3.27m and individuals net buyer $6.29m.

Volume leaders during the week were: Dewan Cement 84m; World Call Tel.78m; Lotte Chemical 77m; Fauji Foods Ltd 38m; Aisha Steel Mills 29m; Azgard Nine 27m; Engro Polymer 26m;Dost Steels Mills 19m; Power Cement 17m; K-Electric 12m; Faysal Bank Ltd 8m; Pace Pak Ltd 7m; Dewan Motors Ltd 6m.

 

Triggers.

– Hascol Petroleum agreeing to pay $9.5m to settle row.

– Supreme Court banning four brands of packaging milk.

– Key net sellers were foreigners worth $12.6m.

Conclusion

The RSI and the MACD are heading down. Any upward will face resistance in the range of 44,355-44,4495.

Raees Uddin Khan,
Research & Development, Institute of Securities Management Research & Training (Pvt) Ltd, Karachi.
Dated: February 3, 2018

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