Weekly Review: Equity market to eye future investment prospects

KARACHI: The equity market will look into the prospects of foreign investments as Prime Minister Imran Khan is visiting UAE on February 10 and Saudi Crown Prince is visiting Pakistan on February 16, 2019.



Analysts at Arif Habib Limited said that the market likely stay range bound given no material event expected in upcoming week.

“However, visit of Saudi crown prince expected on February 16, 2019 may uncover investment for construction of an oil refinery in Pakistan and other ventures. In addition, the Prime Minister of Pakistan is visiting UAE on February 10, 2019 to attend World Government Summit where he will encourage foreigners to invest in different sectors in Pakistan.”

This week trading commenced on a positive note and the market gained over 502 points on Monday as China came to Pakistan’s rescue and agreed to provide a loan of USD 2.5 billion to support depleting foreign exchange reserves.

Whereas other news flows regarding GIDC settlement and issuance of directives by SBP for overseas investors to invest in Pakistan Banao Certificate also fueled investor’s sentiment.

However, down gradation of Pakistan’s long term credit rating from B to B- by S&P coupled with pressure on international oil prices dented investors sentiments.

The benchmark KSE-100 closed at 40,887 points, down by 225 points or 0.55 percent WoW.

Contribution to the downside was led by i) Commercial Banks (-185points) due to selling from mutual funds and insurance companies, ii) Oil and Gas Exploration Companies (-83points) due to decline in international oil price, iii) Oil and Gas Marketing Companies (-52points), iv) Tobacco (-33points), and v) Chemicals (-25points).

Scrip wise major losers were HBL (-79points), UBL (-47points), DAWH (-41points), PPL (-41points) and OGDC (-36points).

While, sectors that contributed positively to the index were i) Cement (+106points) amid correction in international coal price by 4 percent WoW to USD 86/ton, ii) Automobile Assembler (+28points) and iii) Pharmaceuticals (+20points).

Foreign buying continued this week clocking-in at USD 12.2 million compared to a net buy of USD 12.3 million last week. Major buying was witnessed in Commercial Banks (USD 4.7 million) and Fertilizer (USD 2.7 million).

On the local front, selling was reported by Mutual funds USD 22.6 million followed by other organizations (USD 1.1 million).

That said, average daily volumes for the outgoing week were up by 10 percent to 192 million shares likewise value traded jumped by 26 percent to USD 62 million.

Other major news: i) China comes to Pakistan’s rescue with USD 2.5 billion loan, ii) SBP issues directives for investment in Pakistan Banao Certificates, iii Pakistan signs USD 10 billion gas pipeline agreement with Russia, iv) GIDC reduction to provide industries Rs50 billion relief, v) Sehat Insaf Card: Free health facility for 80 million people, and iv) Forex reserves rise to USD 14.89 billion.

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