Daily Times

KARACHI: Investors’ sentiments remained mixed during the past week on the back of Pakistan being added to the ‘grey list’ of Financial Action Task Force (FATF).

The KSE100 index gained momentum and rose 1.1 percent or 473 points week-on-week (WoW) to close at 43,740, with bulk of the gains (347 points) being contributed by the Cement Sector.

The market opened the week on negative tone owing to media reports about Pakistan’s addition on the FATF Grey List. However sentiments improved over the week on positive news flow emanating from cement sector as well as encouraging developments on the political front.

JS Research’s analyst Faizan Ahmad said although authorities remained confident that inclusion of Pakistan into the grey list will have minimal impact, market participants continued to ponder over likely ramifications of Pakistan’s trade with other countries and impact on various listed sectors.

Global markets rattled further as US President Trump proposed to levy 25 percent and 10 percent duties on steel and aluminum imports, respectively. While increased protectionist measures from the world’s largest economy do not bode well for the global markets, we opine that the additional duties, if imposed, will not have any impact on the margins of Pakistan based steel manufacturers, said Elixir Research Department’s report.

Cement Sector stood out as the performer, rising 7.0 percent during the week, owing to an increase of Rs 10/bag in cement retail prices in North. Resultantly, retail prices in Punjab have jacked up to Rs 515/bag while those in Khyber Pakhtunkhwa (KPK) are now back to Rs 500/bag.

On economic front, Foreign exchange reserves held by the State Bank of Pakistan (SBP) continued to remain under pressure, decreasing 2.82 percent on a weekly basis to stand at USD12.3bn as at 23rd February, 2018.

Foreign Investors offloaded shares worth $11.38 million during the week; where a bulk of the outflows were attributed to off-market deal in Hub Power (HUBC) as 20.4 million shares were sold at 2 percent discount to the market price.

Amongst domestic investors, Companies and Insurance Companies stood out as they mopped shares worth $ 11.74 million and $ 6.01 million, respectively.

“With Senate Elections held on Saturday, we expect the market to open on a positive note tomorrow. Furthermore, investors will look to get clues on cement retail prices over the next week, where any signs of further stability in prices should bode well for the sector and market sentiments. Geopolitical concerns keep market performance in-check”, the report added.

Published in Daily Times, March 4^th 2018.