Pakistan stocks slipped 0.79 percent in the week ended September 29, 2017 primarily due to apprehensions on local political front led by of ongoing inquiry against reigning finance minister, lack of triggers and mixed trend of foreign flows, dealers said.
“Investors endured another week of insipid market performance, as overhang of ongoing political events combined with uncertain economic outlook continues to keep investors sidelined,” Atif Zafar at JS Global Capital said.
The KSE-100 shares index shed 0.79 percent or 640.93 points to close the week at 42,409.27 points. KSE-30 shares index lost 1.25 percent or 275.09 points to end at 21,605.95 points.
“Participation thinned as trading took a backseat to politics; average volumes were down 14 percent to 146 million shares a day,” Adnan Sami at Topline Securities said. Foreign buying was recorded at $0.52 million during the outgoing week compared to $0.4 million in prior week.
There was, however, some interest witnessed in the fertilizer sector up 2.4 percent, on the back of strong August off-take and rising international urea prices. Oil & gas exploration sector remained in limelight as Pakistan Oilfields (POL) up 6.5 percent announced a new oil and gas find and international oil prices touched their highest levels since October 2015.
On the other hand, cements down 3.7 percent were yet again a key laggard as provisional data for September suggests a decline of 18 percent in domestic demand during the month. Banks too dragged down the index as National Bank (NBP) down 15.3 percent is expected to take a significant hit of Rs48 billion after the Supreme Court dismissed appeal filed by the bank with respect to its pension fund case. Habib Bank (HBL) down 2.3 percent continued to face the ill effects of the recent fine imposed on it by the US Regulators.
Other major news of the week include subsidy on sugar exports to be shared by federal and provincial governments, defense ministry clearing sale of K-Electric to a Chinese firm and arbitration favoring independent power producers (IPPs) against national transmission and dispatch company (NTDC).
It may be mentioned here KSE-100 Index recovered 2.9 percent in September 2017 after posting a steep fall of 10.4 percent in August 2017, led by decline in current account deficit – $550 million in August 2017 versus 42.05 billion in July 2017 – and modest pickup in foreign portfolio flows.
Adnan Sami said after 14-month lull, foreigners were significant buyers in September 2017. Net foreign buying was recorded at $28.3 million, the only other month in 2017 to record a net inflow was June 2017 wherein net foreign buying was $7.9 million.
AN analyst at Elixir Securities said while there were no major political developments during the outgoing week, market remained range bound on lack of triggers. The result season also failed to induce investor interest. Moreover, the Status Quo in September monetary policy and guidance with regards to future monetary policy outlook was not materially different from prevalent expectations.
“Market going forward is thus likely to revolve around indictment of Ex-Prime Minister Nawaz Sharif by the National Accountability Bureau (NAB) scheduled for October 02, 2017. On economic front, sentiments are likely to remain hinged on whether decision makers move to materialize government plans to arrest the external imbalances”.