Weekly review: KSE-100 advances 3.57% as buying euphoria continues

Saudi rescue package, expectation of assistance from the UAE and China keep investors optimistic

KARACHI: The buying euphoria, which emerged during the previous week, continued in the outgoing week as well as the KSE-100 index maintained its upward march, gaining 1,448 points or 3.57% to settle at 42,004.

Investors continued to celebrate the $6-billion Saudi financial package, which would help address the economic challenges. Moreover, news that Pakistan was seeking further assistance from the UAE and anticipation of more inflows from China following the prime minister’s visit also contributed to the upbeat mood.

Monday witnessed a phenomenal rally with the index making significant gains ahead of Prime Minister Imran Khan’s trip to China. All eyes were focused on the trip during which Beijing was expected to announce a financial support package for Pakistan.



The remarkable performance was supported by aggressive volumes as Monday recorded the highest turnover of 460 million shares since the inclusion of Pakistan in the MSCI Emerging Markets index, stated AHL Research in its report.

There was a bullish trend in all the five sessions amid choppy trading and profit-taking by some investors. The rally was mainly led by investor interest in blue-chip stocks.

By mid-week, a wave of political uncertainty took over as the Supreme Court announced its judgement acquitting Aasia Bibi in the blasphemy case. Resultantly, protests erupted in various parts of the country, which dampened the buoyant mood.

The index remained volatile on Friday, however, despite that it managed to close above the 42,000 mark.

“The KSE-100 index closed the week at a nine-week high at 42,004 while it was also for the first time since April 2018 that all five sessions of the week ended on a positive note,” said Topline Securities.



Sector-wise contribution was led by commercial banks (+482 points), cement companies (329 points), power generation and distribution (135 points), pharmaceutical firms (133 points) and oil and gas marketing companies (117 points).

On the other hand, negative contribution came primarily from oil and gas exploration companies (-174 points) due to declining international crude oil prices.

In terms of individual stocks, HBL (+240 points), Hubco (120 points), Searl (104 points), Engro (88 points) and DG Khan Cement (76 points) were top contributors to the index.

Foreign selling continued during the week which came in at $12.6 million compared to net selling of $17.2 million last week. Selling was witnessed in exploration and production stocks ($7.1 million) and commercial banks ($4.5 million).

On the domestic front, major buying was done by individuals ($20.6 million) and insurance companies ($4.7 million).

Trading activity picked up with average daily volumes gaining 7% week-on-week to 322 million shares while average daily value jumped 26% to $95 million.

Among major highlights of the week were power firms being allowed to recover Rs140 billion from consumers to offset the cost of industrial support package, government deciding not to privatise PIA and Pakistan Steel Mills, increase in the petrol price by Rs5 per litre, Pakistan improving its ranking by 11 places on the World Bank’s Doing Business Index and foreign exchange reserves falling to a five-year low of $7.7 billion.

Published in The Express Tribune, November 4^th, 2018.

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