KARACHI: After tanking four weeks in a row, stocks recovered 0.47 percent in the week ended September 08, 2017 and the feel good factor would persist Habib Bank (HBL) is expected to drag the index up after the news was confirmed about a much lower penalty that would be levied on the bank by the NY Regulator, dealers said.

“The settlement reached between the New York Department of Financial Services and HBL, where the bank has agreed to pay a fine of $225 million as opposed to initial suggestions of $630 million, somewhat pulled back market sentiments after weak recordings earlier in the week,” Faizan Ahmed at JS Global said.

The KSE-100 shares index gained 0.47 percent or 194.03 points to close the shortened week at 41,401.02 points. KSE-30 shares index gained 0.49 percent or 102.97 points to end at 21,105.87 points.

Average daily trading volumes during the week reached 136 million shares, up 25 percent from 109 million shares observed last week. “Volumes were driven by retail friendly scripts led by The Resource Group (TRG), Azgard Nine (ANL), Aisha Steel Mill (ASL) and Bank of Punjab (BOP),” an analyst at Elixir Securities said.

On a positive note though, foreign selling somewhat abated with offshore investors recording net selling of only $0.3 million during the week.

Exploration and production (E&Ps) surged 3.6 percent as OGRA notified increase in wellhead gas prices, automobiles gained 1.3 percent as expectations of Rupee devaluation fades away and pharmaceuticals were up 2.6 percent on news of government looking to increase medicine prices and drug regulator approving vaccine for dengue virus.

On the other hand, cements were down 0.3 percent on concerns over pricing arrangement and textiles shed 1.2 percent as hopes for near-term Rupee devaluation fizzles out.

Adnan Sami at Topline Securities said Prime Minister Shahid Khaqan Abbasi set up a Cabinet Committee on China-Pakistan Economic Corridor for the implementation of the strategic $55 billion project, completely overhauling the existing institutional arrangement and bypassing the planning ministry. “The move will further consolidate the premier’s grip on power as he has already taken complete control of all cabinet committees dealing with economic matters,” Sami said adding, “the new arrangement suggests that every important decision on concerning the economic and development of the country will have to be initiated or decided on by the premier himself.”

Apart from this, China ruled out any change in policy on Pakistan after BRICS showed concerns over terror outfits in Pakistan, fiscal deficit ballooned 5.8 percent of GDP during FY17, foreign exchange reserves recorded an increase of $386 million to reach $20.39 billion prices of petrol were increased by Rs2/litre.

Mutual funds’ net selling clocked in at $11 million during the outgoing week while individuals absorbed this selling with net buying of $10.8 million.

Going forward, overall macroeconomic outlook and speculation on the PKR/USD depreciation will likely keep volumes low as investors await further clarity. Despite this, event driven trade may continue in the market where the resolution of the HBL fine will likely drive volumes and market performance.