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Stocks continued upward movement, gain 530 points
Summary

Pakistan rupee depreciation, which is regarded as favorable for Pakistan Stocks Exchange (PSX) continued to influence investors sentiments along with buying attitude of the foreigners turned this week profitable week for the PSX. The average volume too this week increased to 240m as market capitalization climbed to Rs9,370 trillion.

On Monday trading started on dull note and the volume also declined by 18 percent to 188m. The investors exercised control as this was a roll-over week. The Index traded in the range of 330 points and gained 53.35 points to close at 45,083.57 points. OGDC remained top gainer as oil sector added 51 points as rising geopolitical risk in Middle East has led to increase in oil prices.

The stock went for correction on Tuesday after four-day rally. The Index lost 79.38 points to close at 45,004.19. The market remained range bound between 300 -400 points but volume increased to 236m. Shanghai Electric fresh public announcement of intention to acquire 66.4 percent equity stake of KEL boosted K-Electric stock with 30m shares.

On Wednesday, a rally in cement sector with expected cement prices increase by Rs.50 per bag boosted investors interest in cement, which added 67 points to the Index. Also there was an expectation of investors in increase of a 25 basis points in key policy rate in upcoming monetary policy on Friday. The Index gained 168.80 points to close at 45,172.99.

The foreigners turned buyers after two days selling on Thursday to bought stock worth $9.36m. This led into a jubilant mood to gain 316.63 points to close at 45,489.62. Moreover higher global crude oil prices, revision in local auto and cement prices and announcement coming for SBP policy led to gain in stock exchange.

The last day Friday turned to be a range bound for KSE-100 Index, which led with gain of 70.68 points to close at 45,560.30. The volume too declined by 22 percent to 230 million and the foreigner turned seller with $1.39m.

Participants/Activity

On average shares of 367 companies were traded. Of these 172 were gainers and 175 were losers and 20 remained unchanged.

Foreigners were net buyer of $1.90m during the week; companies were seller by $3.73m, Banks were seller $0.73m; Mutual fund net seller 10.43m and individuals net buyer $8.47m.

Volume leaders during the week were: K-Electric 128m; TRG Pakistan 87m; Engro Polymer XD 69m; Lottee Chemical 30m; Pak Electron 27m; Fauji Foods Ltd 26m; Unity Foods Ltd 25m; Fauji Cement 24m; JS Bank 12m; TPL Corp Ltd 10m; Faysal Bank XB 9m; Nimir Resin Ltd 10m.

 

Triggers
  • SBP study highlighting inflation at 6% as optimal for Pakistan economy.
  • Expectation of increase in prices of urea by Rs.100/bag.
  • Car makers like Honda, Pak Suzuki and Toyota raise prices despite higher localization.
  • Nissan set for second try at Pakistan auto market.
  • Government to issue security certificate for K-Electric sale to Chinese multinational Shanghai Electric Power Ltd.
Conclusions

PSX remained bullish this week despite one day fall on Tuesday. The market moved around 45,000 points as it turned out to be a resistance for the market. The Index crossed 45,431, a50 percent retracement from 53,127 and 45,494 high posted in Jan24. Immediate support is 44,300.

Raees Uddin Khan,
Research & Development, Institute of Securities Management Research & Training (Pvt) Ltd, Karachi.
Dated: March 31, 2018

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