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Stock market at a glance

Market Review

Market activity during the outgoing week remained range bound, with the index closing at 42,924pts, down by 0.1%WoW (36pts). During the week market participation remained lackluster as evident from ADT and ADTV that declined by 38%WoW and 29%WoW, respectively. Foreign investors also exhibited a net outflow of USD36.4mn.

During the week, APCMA released the latest figures for cement dispatches which increased by 5%YoY in Jul’18 as a result of slowdown in construction activity due to general elections and monsoon season in North. Furthermore, sales of petroleum, oil and lubricants declined by 30%YoY in Jul’18 on the back of rise in international fuel prices as well as subdued furnace oil demand. Additionally, in the backdrop of surging circular debt, 6 IPPs have served notices of non-payment to CPPA-G.

On the macro front, foreign exchange reserves of central bank increased to USD10.4bn, up by USD19mn. Furthermore, the government is planning to issue a dollar denominated bond through the Central Directorate of National Savings (CDNS) in order to reduce debt payment deficits. In addition to this, Pakistan plans to borrow up to USD4bn from Islamic Development Bank (IDB) in order to address the issue of dwindling foreign reserves. Also, tax revenue collected during FY18 fell short by PKR184bn in comparison to the revised target of PKR3.95trn on the back of muted furnace oil demand.

Outlook

The announcement of the first session of National Assembly implies that the cabinet formation process will commence which may drive sentiments in the upcoming week. Additionally, the ongoing result season would also play its role in dictating the direction of individual stocks.

News This Week

Economic highlights & Data points

Forex reserves fall to USD17.01bn| (The News): The country’s overall forex reserves went slightly down to USD17.01bn, compared with USD17.08bn in the preceding week, the central bank said on Thursday. The central bank’s foreign exchange reserves increased USD19mn to USD10.37bn during the week ended August 3, the State Bank of Pakistan said on Thursday.

Govt speeds up special overseas bond issuance to raise USD1bn| (The News): Cash-strapped government hurries to issue a planned dollar/rupee bond through the Central Directorate of National Savings (CDNS) to reduce debt payment deficits, as IMF bailout is likely to remain out of reach for the time being, government officials said on Thursday.

Pakistan poised for USD4bn loan from Islamic Development Bank | (The News): Pakistan plans to borrow more than USD4bn from the Saudi-backed Islamic Development Bank (IDB) as part of its attempts to restore dangerously low stocks of foreign currency.

Govt’s debt rises to PKR24.2trn as fiscal space shrinks | (Tribune): The federal government’s debt rose to PKR24.2trn at the end of FY18, a net addition of PKR9.8trn in the last five years, at an annual growth rate of 13.5%, reported the State Bank of Pakistan (SBP) on Wednesday.

FBR misses target by PKR184bn in FY18 on muted oil demand, subsidies| (The News): Tax revenue fell short of massive PKR184bn compared to the downward revised target of PKR3.9trn for FY18 with the officials attributing the decline to subsidies and muted furnace oil demand, it emerged on Friday.

 

Sector and Corporate highlights

Urea price rises as some plants close down | (Tribune): The price of urea is constantly on the rise as demand and supply gap widens with each passing day, industry sources say.

POL sales fall 30%YoY| (The News): Sales of petroleum, oil and lubricants (POL) fell 30%YoY to 1.64mn tons in July as rise in international commodity prices and subdued furnace oil demand weighed down the sale.

Drug prices frozen | (The News ): Chief Justice Mian Saqib Nisar on Friday stopped the Drug Regulatory Authority of Pakistan (DRAP) from increasing the prices of medicines in the country. Directing the authority to keep prices of all medicines frozen till decision on the cases, the CJ asked it to decide within 10 weeks all pending cases of pharmaceutical companies regarding prices of drugs.

Cement sales grow by 5%| (Dawn): Cement sales posted a growth of 5% in 1MFY19. In July, total cement dispatches were recorded at 3.6mn tons, up 5%YoY from 3.4mn tons in the corresponding period of last year.

Circular debt surges to PKR656bn, 6 IPPs serve notices on CPPA-G| (BR): As the circular debt has touched PKR656bn, six Independent Power Producers (IPPs) have served notices of non-payment to Central Power Purchasing Agency Guaranteed (CPPA-G).

SBP moves to regulate banks’ overseas operations| (Dawn): After two of the country’s largest private banks had their skirmishes with regulatory authorities in the United States, the State Bank of Pakistan moved to develop a more detailed “governance framework” for the overseas operations of all banks.

Stock Market Synopsis
Last week This Week %Change
Mkt. Cap (US $ bn) 70.1 70.7 0.8%
Avg. Dly T/O (mn. shares) 320.2 198.8 -37.9%
Avg. Dly T/O (US$ mn.) 103.2 73.3 -29.0%
No. of Trading Sessions 5.0 5.0 0.0
KSE 100 Index 42,330.3 42,924.0 1.4%
KSE ALL Share Index 30,715.3 30,944.7 0.7%

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