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Bullish trend persists with KSE-100 index up 4%wow
Summary

Crown Prince Sheikh Mohammed turned his private hunting trip into official visit and formalized a $6.2 billion bailout package on Sunday to help support the country’s economy while the United Arab Emirates (UAE) package is of same terms and conditions as those of Saudi Arabia. It is expected that the two packages would help save Pakistan a total of $7.9 billion on oil and gas imports accounting for over 60 percent of the annual oil import bill worth $12-13 billion. These are the positive news for the investors and the stock market remained buoyant for the week and added 1501.59 points.

The KSE-100 index jumped from 37,500 level to close to 39,000 level. The average volume too increased to 139 million from 126 million shares last week. The market capitalization too increased by 200 billion to Rs7,878 trillion.

With the announcement of UAE package on Sunday the market was totally rallied 1,014.91 points on Monday, the highest single day in 50 sessions since October 24, 2018 to close at 38,562.40. Mutual Funds had a buying worth $5.47 million while the volume jumped to 157 million from only 64 million last Friday.

Bulls continued to move up on Tuesday and KSE-100 Index added 490.10 points to close the Index at 39,052.50 points. The volume increased to 166 million shares.

On Wednesday there was profit-taking in the market KSE-100 shed 10.81 points to close below 39,000 level to 38,921.69 points. The volume too declined to 134 million shares.

The stocks again recovered on Thursday. The reports that the Financial Action Task Force had expressed a degree of satisfaction over Pakistan’s efforts and action plan to combat money laundering. The market closed at 39,090.28 adding 168.59 points. The rising price of oil in the international market boosted exploration and production stocks.

There was volatility in the market on Friday as Index moved between high of 39,284.39 to low of 38,794.68. The Index finally settled on 39,049.08 losing 41.20 points.

 

Participants/Activity

On average shares of 347 companies were traded. Of these 171 were gainers and 153 were losers and 23 remained unchanged.

Foreigners were net buyer of $0.59 million during the week; companies were seller by $5.00 million, Banks were seller $3.51 million; Mutual Funds net buyer $6.72 million and individuals net buyer of $5.2 million.

Volume leaders during the week were: K-Electric Ltd 54m; Pak Elektron 47m; TRG Pak Ltd 35m; Sui Southern Gas 24m; Bank of Punjab 19m; Unity Foods 18m; Lottee Chemical 15m; World Call Telecom 8m; Engro Polymer 6m; Dewan Cement & Engro Fertilizer 5m each.

Triggers
  • UAE, Pakistan formalize $6.2 billion bailout package.
  • Reserves with SBP fell by $239 million to $7.05 billion as on Jan4. Holding of Commercial Bank $6.55 billion and total liquid reserves $13,597 billion.
  • Remittances from overseas Pakistanis jumped 10 percent to $10.718 billion the first six months of this fiscal year as compared to $9.744 billion of the same period last year.
  • Fitch sees fiscal deficit soaring to 6 percent of GDP in fiscal year 2018-19 from 5.8 percent in 2017-18.
  • World Bank sees economic slowdown with growth of Pakistan GDP to 3.7 percent in fiscal year 2018-19.
  • Heads of Sui Southern, Northern Gas fired by PM over a severe winter energy crisis.
  • Five-year plan (2018-23) eyes 5.8 percent growth in GDP.
Conclusion

Technically, the Index is expected to revisit 39,226, where a break above will target 50-DMA that stands at 39,611. Any downside will find support at 38,922.

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