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Bourse bullish on modest DR hike, C/A deficit reduction

State Bank of Pakistan''s (SBP) decision to raise discount rate (DR) by 50bps came as a relief to the local bourse as the short notice prior to November MPS announcement had sparked concerns in some circles that SBP may opt for a sharper rate hike.

A bullish momentum was further supported by reduction in Current Account Deficit to $166 million in October 2013 from $574million in September 2013, investors pre-IPO/Book building excitement on Engro Fertiliser, government''s continuous lobbying for the approval of GSP Plus in Europe and Pakistan Telecom Authority''s efforts to blacklist and block unregistered IPs to curb grey trafficking, analysts said.

The KSE-100 Index managed to gain 561.51 points during the last week ended on November 22, it closed 2.4 percent higher at 23,847 (all-time-high level) against 23,287 level. Average daily volumes also witnessed an uptick, rising by 11percent WoW to 178mn shares.

Similarly, the market capitalisation, remaining on higher side, stood up at Rs 5.680 trillion from Rs5.515 trillion and average daily value also stayed in green circle, increased by 32.9 percent, stood higher at Rs 8.50 billion versus Rs6.40 billion.

Analysts further commented that Benchmark 100-index gained 2.4percent on week on week basis to close at historic high at 23,847 with 35percent improved volumes of average Rs 8.5bn.

They said that the key highlights remained US $11mn foreign net in-flow (November 18 - 21), Engro Fertilisers book building which was 3x over-subscribed at 28.25 strike price while Pakistan Forex reserves (held by the State Bank) fell to 5 years low of $3.6 billion.

They said that investors'' interest was mainly seen in Engro Corp, FCCL, PTC, PSO, and Cement stocks. Investors should remain watchful about the upcoming IMF payments, position of Forex reserves and movement of PKR with respect to $. "We believe sentiments will mainly be led by foreign flows and smooth future position roll over", analysts said.

The universe top performers of the week were: Adamjee Insurance, Lafarge Pakistan Cement, Pak Suzuki Motor, Pakistan Telecom, ICI Pakistan, Attock Refinery, Pakistan State Oil, DG. Khan Cement, Nishat (Chunian) and Attock Petroleum Ltd.

According to day-by-day details, the peaceful Muharram processions particularly in Karachi, threw positive impacts on stock-investors and traders as Bulls ruled over local bourse on Monday. The KSE-100 index gained 324.18 points, reached at the level of 23,611.24 against 23,287.06.

After more than four months, the KSE-100 Index witnessed an all-time-high growth on the back of continued foreign inflow. The index on Tuesday closed at 23,819.43 levels against 23,611.24 levels on a day earlier. The KSE-100 Index touched 24,000 levels during the intra-day trading on Wednesday but could not maintain that ever-highest record and the index closed on negative note at 23,800.97 with loss of 18.46 points.

The market witnessed volatile session on Thursday, closed on negative note due to selling pressure witnessed in last few hours. The KSE-100 Index lost 16.79 points, closed at 23,784.18 against 23,800.97 levels on a day earlier.

And on Friday, the KSE witnessed Bull-run session; 100-index gained 63.39 points, closed at 23,847.57 level despite the tension emerging in city due to rallies of religious parties against Rawalpindi Ashura-day violence.

Copyright Business Recorder, 2013


Index Closing Chg%
Arrow DJIA 17,804.80 0.15
Arrow Nasdaq 4,765.38 0.36
Arrow S&P 2,070.65 0.46
Arrow FTSE 6,545.27 1.23
Arrow DAX 9,786.96 0.25
Arrow CAC-40 4,241.65 0.18
Arrow Nikkei 17,621.40 2.39
Arrow H.Seng 23,116.63 1.25
Arrow Sensex 27,371.84 0.90

ICT 2014

Foreign Debt $61.805bn
Per Cap Income $1,386
GDP Growth 4.14%
Average CPI 8.6%
Trade Balance $-2.309 bln
Exports $1.957 bln
Imports $4.266 bln
WeeklyDecember 18, 2014
Reserves $14.04 bln