Gloomy outlook persists

Pakistan Stock Exchange (PSX) remained under pressure due to selling by both local and foreign investors during the outgoing week ended on March 31, 2017. The benchmark KSE-100 index declined by 815.12 points and closed at the level of 48,155.93 points.
Trading activities also remained thin as average daily volumes on ready counter decreased by 3.5 percent on week-on-week basis to 248.64 million shares as compared to previous week''s average of 257.78 million shares. The average daily trading value however increased by 8.6 percent to Rs 11.41 billion.
The foreign investors chose to book profits during the week, as the FIPI registered $19 million of net selling during the week, against $3.5 million of net buying activity witnessed a week earlier. The largest net foreign outflow of $3.87 million was witnessed in the cement sector during the week while foreign corporate, with their net outflow of $20.39 million, were the largest contributor to total outflow during the week.
An analyst at AKD Securities said that continuing to slide amidst weakening volumes, the absence of positive news flows, despite positives arising from headway in forming regulations for margin financing by the SECP closing the week at 48,156 down 1.7 percent. Stocks leading the bourse include SHEL (up 6.6 percent), MTL (up 3.9 percent), ASTL (up 2.4 percent) and MEBL (up 2.1 percent), whereas laggards were HASCOL (down 7.6 percent), AKBL (down 6.1 percent), KEL (down 5.8 percent), NML (down 5.5 percent). Volume leaders were BOP (140.8 million shares), ANL (116.7 million shares), KEL (64.7 million shares) and ASL (62.5 million shares). An analyst at JS Global Capital said that the market maintained its gloomy outlook which has been persisting for the past few weeks, with the KSE-100 index ending down 1.7 percent on week-on-week basis to close at 48,156 levels. Average volumes also took a hit, down 3.5 percent, as investors employed a prudent approach ahead of the all-important Panamaleaks verdict from the apex court. Oil & Gas Exploration sector ended in the green zone this week on 4.6 percent higher crude oil prices and notice pertaining to acquisition of 20 percent working interest in Bannu West by MARI (up 14.9 percent). Cement sector also underwent price deterioration (down 2.6 percent), pulled down by the news of the KP government issuing 14 licenses to companies (including GWLC, BWCL) to set up cement factories in the province.
An analyst at Arif Habib Limited said trading at the local bourse commenced on a dull note, in absence of any positive triggers. Lack of participation by the investors amid uncertainty revolving around the much awaited Panama Case decision and bridge time till the revised leverage product arrives, kept the index under pressure. Sectors that remained top laggards during the week were Commercial Banks, Cements and Fertilizer sector where each eroded 336 points, 158 points and 130 points from the index, respectively. On the other hand, it is pertinent to state that MARI emerged as the top contributor to the index (up 85 points); the rally was attributed to a sizable jump in remaining recoverable reserves in its crown jewel - Mari Gas Field (increase of 60 percent from June 2016 levels). As a result, the E&P sector managed to contribute 51 points to the market, slightly behind the Tobacco sector which outperformed with a contribution of 66 points.