Equities remain unstable

Pakistan Stock Exchange (PSX) witnessed bearish trend during the outgoing week ended on November 24, 2017 due to investors concerns over political situation in the country. BRIndex100 lost 68.83 points on week-on-week basis to close at 4,294.82 points. Average daily trading volumes stood at 96.282 million shares.
BRIndex30 decreased by 61.86 points to close at 21,289.11 points with average daily turnover of 74.288 million shares. Pakistan's benchmark KSE-100 index declined by 595.99 points on week-on-week basis and closed at 40,248.51 points. Trading activities on the ready counter slightly improved as average daily volumes increased by 5.8 percent to 112.21 million shares as compared to previous week's average of 106.05 million shares. Average daily trading value however declined by 7.9 percent to Rs 4.95 billion.
The foreign investors were net sellers of equities worth $6.28 million during the outgoing week as compared to an inflow of $1.13 million in the preceding week. Total market capitalization decreased by Rs 72 billion to Rs 8.356 trillion.
An analyst at AKD Securities said that despite political noise and upward trend in international oil prices (Brent: up 1.6 percent on week-on-week basis), benchmark KSE-100 index shed another 596 points to close the current week at 40,248, down 1.5 percent. Distressed energy chain (HUBC/PSO/ATRL down 2.6/5.5/7.0 percent) on account of abrupt closure of FO based power plants was the major culprit behind lackluster performance of bourse during the week. Performance leaders (of AKD universe) during the week were KEL (up 11.9 percent), FFBL (up 4.1 percent), OGDC (up 1.5 percent), MCB (up 0.94 percent) and LUCK (up 0.62 percent) while laggards included PSO (down 5.5 percent), KAPCO (down 4.8 percent), ASTL (down 4.6 percent), NBP (down 4.0 percent) and FCCL (down 3.9 percent).
An analyst at JS Global Capital said that political jitters continued to shake market participants with KSE-100 index closing down 1.5 percent. The Prime Minister finally accepted Finance Minister's 'leave for absence' due to his ill-health, while sit-in in the capital etc. continued to create an environment of instability. Other than political news, government's decision to shut Furnace Oil (FO) based power plants also affected performance of OMCs (down 4.1 percent) and Refineries (down 2.7 percent) sectors, wiping out 218 points from the index. As a result, across the board pressure was seen in other sectors as well such as Fertilizers (down 1.3 percent) and Cements (down 1.5 percent). As a result of overall uncertain market outlook, Mutual Funds and Foreign Investors continued to offload positions with net selling of $3.5 million and $6.2 million worth of equities, respectively.
An analyst at Arif Habib Limited said that the market exhibited a mixed trend during the outgoing week. Refinery, OMCs and Power sector remained under pressure during the week as due to lower electricity demand during winters, the government has decided to close high cost furnace oil based power plants and switched to newly commissioned RLNG and coal based power projects. The sectors that contributed negative points to the index include Commercial Banks (down 122 points), Oil & Gas Marketing Companies (down 98 points), Food & Personal Care Products (down 80 points), Fertilizer (down 68 points) and Power Generation & Distribution (down 62 points). Stocks that negatively contributed to the Index include NESTLE (down 72 points), PSO (down 55 points) in anticipation of demand of furnace oil to go down significantly, ENGRO (down 53 points) attributable to down gradation from the MSCI Mid-cap to Small cap, UBL (down 50 points), HBL (down 48 points) and HUBC (down 38 points). On the flip side, the stocks in the green were PAKT (up 54 points), KEL (up 36 points) on the expectation of materialization of Shanghai Electric deal and review on the determination of Multi Year Tariff by NEPRA and OGDC (up 31 points).