KSE-100 index slipped by 401 points during outgoing week
Foreign investors kept the buying spree intact with net buying of $12 million.
KARACHI (Haris Zamir) - The capital market shed weight during the outgoing week on speculation that entrance in loan plan with the International Monetary Fund would result in some harsh conditions keeping investors on the sidelines, however some cherry pick buying could avert bigger declines.
After the Prime Minister’s short meeting with the IMF head during his recent visit to Dubai, market participants raised speculations over potential IMF reform package for Pakistan and remained sidelined from the local equity market.
The KSE100 Index slipped by 401pts or 1 percent on the back of profit taking, where share values posted a 10 percent gain last month. The downward trend in the Index during the period was mainly driven by Commercial Banks, Oil Marketing Companies and Fertilizer companies contributing 128 points, 86 points and 70 points to the index decline.
Upcoming visit of Saudi Arabia’s Crown Prince to Pakistan dominated headlines throughout the week as both countries are expected to sign MoU for multi-billion dollar investments; for which the Federal Cabinet has given its nod. Additional investment projects are also expected to be inked during Malaysian Prime Minister’s visit next month. Moreover, support from utilization of oil financing facility extended by the Islamic Development Bank has begun to reflect in the country’s foreign exchange reserves as the State Bank of reserves remained steady at $8.2 billion since the past three weeks, vis-à vis average weekly decline of $200 million previously.
Foreign investors kept the buying spree intact with net buying of $ 12 million recorded the outgoing week. While on the local investors’ side, individuals were net buyers of $5.9 million and Insurance companies were net sellers of $3.6 million.
An analyst from Elixir Securities said that international Coal Prices cooled down by 2.7 percent past week to close at $82/ton. This helped local cement sector to rally and gained almost 3.3 percent. Cherat Cement and DG Khan Cement outperforming their peers, improving 5.4 percent and 5 percent respectively week on week basis.
As per the Pakistan Automotive Manufacturers Association, sale of Passenger Cars was recorded at 19,353 units in January down 2.9 percent compared to same period last year. Decline was due to slowdown in economy, interest rate increase making car financing expensive and higher car prices on the back of PKR depreciation and ban on purchase of vehicle for non-filers for the respective month.
According to an analyst from BMA Capital Management activity in next week will largely hinge on details of Saudi investment plans in Pakistan during the high profile Saudi Crown Prince Mohammed Bin Salman’s two day visit. This, in addition to, easing off of geo-political tensions may guide the market direction. Moreover, Current Account Deficit number for Jan’19 is expected to be released over the upcoming week.
