Bullish rally witnessed

Pakistan Stock Exchange (PSX) witnessed bullish trend during the outgoing week ended on May 26, 2017 on the back of healthy buying mainly by local investors and institutions. The benchmark KSE-100 index surged by 1894.84 points on week-on-week basis and closed at 52,636.87 points level. Trading activities also improved as average daily trading volumes on ready counter increased to 402.29 million shares during this week as compared to previous week's average of 355.06 million shares.
Total market capitalization increased by Rs 314 billion on week-on-week basis to Rs 10.409 trillion. The foreign investors were net buyers of shares worth $6.5 million during the week as against selling of $16.4 million last week. An analyst at Topline Securities said that the KSE-100 gained 1,895 points in the outgoing week as investors accumulated index heavy names ahead of MSCI EM inclusion next week. Index point leaders were OGDC (up 9.4 percent), ENGRO (up 7.4 percent), HUBC (up 6.6 percent), PPL (up 7.3 percent) & HBL (up 3.0 percent) adding 720 points in the index. In terms of absolute return, MSCI EM Small Cap surprises THALL and ISL gained almost 15 percent during the outgoing week.
On the sector front; Engineering outperformed the index with its capitalization expanding 7.7 percent on week-on-week basis as NTC determined that China has been dumping re-bars in Pakistan at half price; while E&P's also beat the market gaining 7.5 percent. Fertilisers, Powergen and Banks broadly tracked the index gaining between 4.0 percent and 2.8 percent. Autos, Textiles, Pharma, Food and Cement sectors under-performed gaining between 2.1 percent and 0.7 percent. Transport and Sugar declined between 2.4 percent and 2.3 percent.
Mutual Funds were biggest buyers with buying of $53.7 million. The foreign investors were net buyers of shares worth $6.5 million during the week as against selling of $16.4 million last week; most of the buying was concentrated in Banks ($10.0 million), Oil & Gas Exploration ($7.5 million) and Fertiliser ($4.5 million), while foreigners sold $8.0 million of Cement sector.
An analyst at BMA Capital said that bullish rally ensued at the local bourse in the first three sessions of the week followed by lackluster sessions as budget announcement draws close given uncertainties. Moreover, decline in oil prices following the OPEC meeting where a lower than expected oil output cut was approved for the next nine months, also dented the sentiments at the bourse. However, despite two lackluster sessions, the benchmark index rose 3.7 percent on week-on-week basis to close at 52,636 level.