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Worrying economic indicators keep investors jittery

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KARACHI: The stock market witnessed a volatile week, as external woes and fast depleting foreign exchange reserves kept the benchmark index under pressure. However, despite this, the KSE-100 index managed to add 352 points or 0.82% in the outgoing week.

Trading began on a positive note as the KSE-100 ended two successive sessions in the green, adding 606 points as political scenario settled after the Senate elections. The bullish run ended on Wednesday with the market succumbing to profit-taking and massive foreign selling.

The critical assessment by the International Monetary Fund (IMF) over external/fiscal account imbalances in its post-programme evaluation report also aggravated the situation.

The following two sessions also remained dull as range-bound trading was witnessed. Investors remained wary of the economic situation and chose to wait at the sidelines.

Participation in the broader market increased by 15% week-on-week to 175 million shares, while traded value fell by 9% to $55 million as hefty trading activity was witnessed in small cap index.

Investors adapted cautious approach as chances are increasing for further devaluation of PKR/USD to restrict the towering current account deficit, said Topline Securities. As a result, investors are hedging their portfolios by investing in dollar index sectors like E&P, which remained the top contributor to index gain during the outgoing week.

In terms of sectors, major contribution came from oil and gas exploration companies (149 points), commercial banks (57 points), OMCs (33 points), tobacco (29 points) and power generation and distribution (25 points). On the other hand, pressure to the downside was led by automobile assemblers (20 points) and textile composite (7 points).

Scrip-wise, top five contributors were POL (61 points), OGDC (61 points), PAKT (29 points), PPL (25 points) and BAHL (24 points). Major laggards were HBL (44 points), MTL (33 points) and FFC (22 points).

Foreign investors remained on the sidelines with net selling of $10.4 million during the week, which was mostly absorbed by local mutual funds (net buying of $6.3 million) amidst improving liquidity. Most of the selling by foreign investors was seen in the banking, oil marketing and technology and communications sector. Local selling was largely executed by individuals ($16.9 million) and NBFCs ($9 million).

Among major highlights of the week were; the government may announce an amnesty scheme this month, government to raise gas prices by 5 to 7%, local furnace oil to be used for power generation, Hubco, Fauji Fertilizer to set up 330MW coal power project, IMF’s called for privatisation of PSM and PIA, Miftah Ismail hinted at relief package for stock market in upcoming budget, foreign remittances inch up 3% to $12.8 billion in 8MFY18.

Ibrahim Fibres Limited, a part of the Ibrahim Group, operates a polyester staple fibre manufacturing plant. The company manufactures a wide range of polyester staple fibres and it also manufactures a variety of blended as well as pure synthetic yarns. Ibrahim Fibres Ltd also owns an in-house power generation plant.

Shell Pakistan

Shell Pakistan Limited markets petroleum and petrochemical products. The company also blends and markets different types of lubricating oils.

Losers of the week

Millat Tractors

Millat Tractors Limited assembles and manufactures tractors, implements, and equipment.

Jahangir Siddiqui Company

Jahangir Siddiqui & Company Limited is an investment company, offering share brokerage, money market, advisory and consultancy, underwriting and portfolio management services. 

Published in The Express Tribune, March 18th, 2018.

 

Ref:  The Express Tribune

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