Lacklustre activity witnessed

Pakistan Stock Exchange remained under pressure during the outgoing week ended on November 17, 2017. BRIndex100 lost 73.44 points on week-on-week basis to close at 4,363.65 points from last week''s closing of 4,437.09 points. Average daily volumes stood at 89.014 million shares. BRIndex30 decreased by 308.26 points and closed the week at 21,350.97 points with average daily turnover of 63.752 million shares.
Pakistan''s benchmark KSE-100 index declined by 591.30 points on week-on-week basis and closed at 40,844.40 points. Trading activities on the ready counter remained thin as average daily volumes decreased by 6.8 percent to 106.05 million shares as compared to previous week''s average of 113.84 million shares. Average daily trading value declined by 15.0 percent to Rs 5.37 billion.
Total market capitalization declined by Rs 65 billion to Rs 8.428 trillion. The foreign investors remained net buyers of equities worth $1.13 million against net outflows of $1.78 million during the previous week.
An analyst at AKD Securities said that the MSCI''s semi annual review and sliding oil prices remained the major highlights of the week while investors gave inadequate consideration to other political events including postponement of decision regarding the reopening of Hudaibiya Paper Mills case. In its review, MSCI reclassified ENGRO (down 6.4 percent) from large cap to small cap stocks while FEROZ, PSMC and SHEL have been removed from small cap stocks. E&P companies (PPL/OGDC/POL-1.6/2.6/1.4 percent) tracked declining oil prices (Brent 2.6 percent) while the abrupt shut down of FO based plants disrupted the entire energy supply chain (ATRL/PSO/KAPCO/HUBC down 4.3/5.5/3.6/0.5 percent). Major performance leaders of the AKD universe were ASTL (3.05 percent), NCL (2.23 percent), INDU (1.57 percent), FFBL (1.40 percent) and MLCF (0.96 percent). The laggards included ENGRO (down 6.38 percent), KEL (down 6.12 percent), PSO (down 5.53 percent), CHCC (down 4.88 percent) and EFOODS (down 4.63 percent).
An analyst at JS Global Capital said that lackluster activity prevailed at the bourse again with KSE-100 index plummeting by 1.4 percent on week-on-week basis. Most of the euphoria witnessed during the last week (strong mutual fund buying) fizzled out as political headwinds took charge of affairs. Unsettling news over timing of elections, ongoing court cases (involving ex-Prime Minister, Finance Minister and Imran Khan) etc. made perfect cocktail to keep investors wary of making fresh investments. Matters on macroeconomic front also remained unexciting as released trade deficit numbers for the first four months of FY18 posted a whopping increase of 31.24 percent on year-on-year basis mainly on account of dull exports and rising imports. Keeping weak outlook into consideration, mutual funds and banks turned into net sellers of $16 million and $4.0 million worth of equities, respectively. That said almost all index heavyweights such as Oil & Gas marketing (down 4.5 percent), Oil & Gas exploration (down 1.9 percent), Fertilizers (down 2.7 percent) and Banks (down 1.4 percent) witnessed selling pressure during the week.
An analyst at Arif Habib Limited said a 1.4 percent downtrend in the KSE-100 index during the outgoing week was led by Pakistan losing ground in the MSCI EM index (0.08 percent weight vis- à-vis 0.14 percent previously). While this was perceived as highly likely given 19.3 percent erosion of the market since the official transition (1st June 2017), reception of the outcome remained gloomy. Meanwhile, on the commodity front, interest in international oil prices fizzled out amid rising US stockpiles and Russia admitting undecidedness on further oil cuts.
Bearish sectors leading the bourse to red were Fertilizers (down 172 points) attributable largely to down gradation of ENGRO from the MSCI Mid-Cap to Small Cap, Commercial banks (down 114 points) reacting to the extension in the imposition of Super Tax in FY18, Oil & Gas Exploration (down 111 points) due to pressure on oil prices, Power Generation (down 82 points) as negative news pertinent to FO led to plant closure and Oil & Gas Marketing (down 67 points) due to aforementioned reason.