KARACHI: Pakistan stocks recovered 3.3 percent in the week ended September 15, 2017, highest weekly gains in four months, as excitement related to FTSE rebalancing and rally in Habib bank (HBL) lifted overall market sentiments, dealers said.
Atif Zafar in a report issued by JS Global Capital said there was some relief for investors during the outgoing week as the benchmark KSE-100 index recovered 3.3 percent, its highest weekly gain during the last four months. “Most of the gains stemmed from relief rally in Habib Bank (HBL) after its lower-than-expected penalty payment, as it contributed around 510 points in total market gains of the week.”
The KSE-100 shares index gained 3.3 percent or 1385.47 points to close the week at 42,787.19 points. KSE-30 shares index gained 4.13 percent or 873.71 points to end at 21979.58 points.
“The week, particularly the last two trading sessions remained all about FTSE’s latest inclusion of 5 stocks from Pakistan in its Asia Pacific ex-Japan Index,” an analyst at Elixir Securities said.
The average daily volumes picked-up 16 percent to 157 million shares. However, they still remained at disappointing levels as locals continue to remain wary of domestic politics and economy.
FTSE has added MCB Bank (MCB), Sui Nothern Gas Pipelines (SNGP), Bank Al-Falah (BAFL), Millat Tractors (MTL) and Thal Limited (THAL) to its Global Equity Series Asia Pacific ex-Japan Index.
“This resulted in resurgence in traded activity at the bourse during the week as opportunist domestic and foreign investors built positions ahead of the inclusion while passive foreign funds bought into the stocks on Friday,” Elixir analyst said.
The market was also buzzed with return of foreign buying, as weekly net activity turned positive after almost two months to clock in at $28 million compared with net outflows of $0.3 million in the previous week.
Key sectors that outperformed during the week were commercial banks up 6.1 percent and oil & gas exploration (E&Ps) up 3.7 percent), whereas sectors that underperformed were automobile assemblers down 0.2 percents and cements 0.4 percent.
Another highlight of the week was results for the refinery sector where FY17 earnings growth for Pakistan Refinery (PRL) came in at 370 percent, Attock Refinery (ATRL) at 663 percent and National Refinery (NRL) at 4.6 percent. The positive results were due to higher gross refining margins.
Moreover, National Savings is mulling launching $500 million to $700 million dollar bond; HBL has paid the entire amount of fine to New York DFS, cement dispatches grew 21 percent and government allowed subsidized export of 0.5 million tons of sugar.
On the political front, a JS Global Capital report said, “the key NA-120 bye election is scheduled for Sunday while NAB is expected to file an appeal for reopening of Hudaibiya Mills’ case within the next seven days, whereas on the economic fore the government has so far failed to come up with a concrete plan to address the concerns over the deteriorating external account.”
As euphoria of PSX being rerated in FTSE emerging market fizzled out in the last trading session, analysts expect the market performance to remain depressed.