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Market remains under bearish spell, index down 2%wow
Summary

The week started on a positive note gaining 157.49 on Monday. The very next day it sank and persist into bearish mode for four consecutive days. The investors remained lukewarm during week searching for clarity on economic front.

The stock traded volume during the week increased by 35% to average volume 177m but market capitalization decreased to Rs.8.678 trillion from Rs.8.753 trillion before Eid holidays. The KSE-100 Index declined below 42,00 level at 41,742.24 on Friday. Major sectors that led to decline were: Cement, Power and Fertilizer.

Stocks gained 157 points on Monday. On the political front nomination for president subsided with the nomination of two candidates of opposition parties against one of PTI. The volume increased from 49 million shares to 218 million on Monday. The KSE-100 Index closed at 42,745.78.

The stock started declining from Tuesday as government failed to present any clear economic road map. The government started assessing the economic pulse of the economy as new Finance Minister Asad Umar pores over debt data and planning to meet SBP Governor and decided to discuss FBR reforms in cabinet meeting. Lack of positive triggers led the Index down by 201 points to close at 42,544.47. The volume too declined to 183m.

The stock continue declining on Wednesday and Index shed 295.03 points to close at 42,249.44 points. The foreigners continued selling $3.80 and the volume further declined to 135m. Cement, fertilizer, oil and gas cumulatively drained 193 points from the index.

On Thursday, the Index decline by 385.92 to close at 41,863.52. The fertilizer shares were worst hit on the news of formation of Economic Coordination Committee’s meeting to discuss with the industry to pass extra gains of Rs.10 billion to consumers.

In last day of the week, the Index shed 121 points to close at 41,742.24 points. Cement, Commercial Bank power generation and chemical led the decline.

 

Participants/Activity

On average shares of 370 companies were traded. Of these 129 were gainers and 221 were loser and 20 remained unchanged.

Foreigners were net seller $9.5m during the week; companies were buyer by $0.43m, Banks were seller $0.06m; Mutual fund net seller $0.1m and individuals net buyers $0.7m.

Volume leaders during the week were: Agri tech Ltd 52m; Engro Polymer 39m Siddique Sons Tin 32m; Unity Foods Ltd 30m; Lottee Chemical 23m; Nimir Resins 16m; TRG Pak Ltd 12m; Engro Chemical, Engro Fertilizer and Fauji Cement Ltd 10m each; Bank of Punjab, Fauji Foods, & World Call Telecom 8m each, Al-Tahur 7m and Descon Oxy 5m.

Triggers

– FBR gets new chief Dr. Muhammad Jehanzeb Khan, Senior officer of Pakistan Administration Services as Chairman Federal Board of Revenue.

– The foreign exchange reserves dropped $8 million to $10.227 billion during the week ended August 2.

– Revenue collection jumps 13.6 percent growth in the first two months of the current fiscal year.

Conclusion

Active decision making by government and president’s election next week shall further bring economic and political clarity for investors.

Raees Uddin Khan, Research & Development, Institute of Securities Management Research & Training (Pvt) Ltd, Karachi. Dated: Sept 1, 2018

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