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Stock market at a glance

Market Review

The outgoing week closed at 42,337pts, down by 4.7%WoW in response to the change in Moody’s outlook of Pakistan’s B3 rating to negative. Consequently foreigners, taking a cautious stance, exhibited a net outflow of USD24.5mn. Market participation exhibited a rise of 29%WoW in ADT and 13.8%WoW in ADTV as investors became more active post Ramazan.

During the week, SECP unveiled new regulations to curb money laundering as well counterfeiting terrorist financing in order to avert being placed on the FATF grey list. Furthermore, textile exports grew by 28%YoY during May’18 to USD1.2bn. Also, NEPRA has allowed K-electric to use RLNG as an alternative fuel for power generation on the condition that it consumes a minimum of 180mmcfd of locally produced gas. Additionally, Shell Pakistan announced plans to invest USD15-6mn to strengthen its retail network in the wake of expectations of an increase in petroleum demand. Moreover, World Bank committed over USD500mn to support renewable energy in Sindh and expand economic activity between Pakistan and Afghanistan through the development of an economic corridor along the Khyber Pass.

On the macro front, country’s current account deficit widened by 43%YoY to USD16.0bn in 11MFY18 on the account of surging imports and subdued growth in remittances. In order to finance the current account deficit, the government is in talks with China to borrow USD2bn.
Additionally, FDI declined by 1.3%YoY to USD2.5bn in 11MFY18. During the week, foreign exchange reserves increased to USD16.8bn, rising by USD341mn over the week, owing to official inflows.

Outlook

The market participants await the crucial decision of FATF in regards to the placement of Pakistan on the grey list, where such a decision may further dampen market sentiments.

NEWS THIS WEEK

Economic highlights & Data points

Forex reserves up USD341mn | (BR): The country’s total liquid foreign exchange reserves posted an increase of USD341mn during last week due to arrival of official inflows. According to weekly report issued by the State Bank of Pakistan (SBP) Thursday, the country’s total liquid forex reserves rose to USD16.8bn as on June 14, 2018 compared to USD16.5bn on June 8, 2018.

Moody’s downgrades Pakistan’s rating to negative on external risks | (The News): US credit ratings agency Moody’s on Wednesday changed Pakistan’s rating outlook to negative from stable on “heightened external vulnerability risk”.

FDI falls to USD2.5bn in July-May: Current account deficit widens to 5.5% of GDP | (The News): Pakistan’s current account deficit widened to USD16.0bn, or 5.5% of gross domestic product, in 11MFY18, as trade gap continued to swell, the central bank’s data showed on Wednesday.

FBR expedites tax recovery drive to meet PKR661bn revenue shortfall| (The News): The Federal Board of Revenue (FBR) has speeded up tax recovery drive to meet a gigantic revenue shortfall of PKR661bn for the current fiscal year ending June 30, officials said on Monday.

WB to give USD500mn for solar energy, regional connectivity | (Dawn): The World Bank is committing over USD500mn through two projects to support renewable energy in Sindh and expand economic activity between Pakistan and Afghanistan through the development of an economic corridor along the Khyber Pass.

Govt in talks with China to get USD2bn loan | (Nation): As foreign exchange reserves are expected to deplete sharply in next couple of months due to financing of current account deficit and massive repayment of loans, the government is negotiating with China to borrow another USD2bn to maintain its reserves.

FBR extends tax deadline | (The News): The Federal Board of Revenue (FBR) has extended the last date for filing statement of income tax and sales tax for the month of May up to June 22, 2018.

 

Sector and Corporate highlights

Textile exports increase to USD1.2bn in May | (The News): Textile exports clocked in at USD1.2bn for May, up 28.4%YoY and 4.8%MoM, official data showed on Wednesday.

Shell plans to invest USD15-16mn to meet growing demand | (Tribune): Shell Pakistan has planned to invest USD15mn to USD16mn in its retail stations in the wake of expectations of an increase in vehicle sales as more automakers enter Pakistan and activities under the ChinaPakistan Economic Corridor (CPEC) gain momentum.

SECP unveils anti-money laundering regulations ahead of FATF June meeting| (The News): Securities and Exchange Commission of Pakistan (SECP) on Wednesday unveiled new regulations to curb money laundering and counterfeiting financing terrorism as the caretaker government is racing to avert being placed on the grey list in June by a global watchdog.

NEPRA allows K-Electric use of RLNG in power production | (Tribune): In its interim order, the power-sector regulator has allowed KElectric to use imported gas – re-gasified liquefied natural gas (RLNG) – as an alternative fuel for power generation, but on the condition that it will first consume a minimum 180mmcfd of locally produced gas.

Stock Market Synopsis
Last weekThis Week%Change
Mkt. Cap (US $ bn)74.670.3-5.7%
Avg. Dly T/O (mn. shares)131.8170.129.0%
Avg. Dly T/O (US$ mn.)53.761.213.8%
No. of Trading Sessions4.04.00.0
KSE 100 Index43,680.741,637.4-4.7%
KSE ALL Share Index31,691.530,152.3-4.9%

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