Daily Times

KARACHI: KSE Index nosedived 4.7 percent or 2043 points Week-on-Week (WoW) on persistent foreign selling and downward revision by Moody’s revised outlook on Pakistan to negative from stable on vulnerable economic position.

Trading activity rose during the week with average daily traded volumes/value going up by 29 percent WoW to 170 million shares.

Commercial banks, Oil & Gas Exploration Companies, Cements and Automobiles were the major index movers, resulting in declines of 668, 358, 218 and 102 points, respectively in the KSE100.

Oil & Gas Exploration Companies fell 5.5%WoW owing to falling international oil prices on expectation of production increase by OPEC in its ongoing meeting with sources revealing 1mnbpd planned increase (but not immediate) to address supply deficit.

Cements/Automobiles declined by 12.5 percent /6.3 percent WoW mainly due to concerns regarding earnings attrition on account of rising costs with Pakistani Rupee /US Dollar depreciation and potential slowdown in demand going forward. Lucky Cement (LUCK) single handedly contributed -111 points to the index decline, as it fell 7.7 percent WoW.

Foreign investors sold shares worth a massive USD24.5mn during the week, with the bulk of selling concentrated in Banks, $ 21.2 million. On the domestic front, Mutual Funds and Individuals offloaded shares worth $ 6.0 million and $ 5.6 million, respectively. On the other hand, Insurance Companies and Corporates stood out as net buyers of $ 15.2 million and $ 14.6 million.

An equity analyst ta Elixir Research said foreign selling is expected to continue keeping a lid on returns owing to fears of further Pakistani Rupee depreciation, US Federal Reserve Bank’s (Fed) expectation of aggressive interest rate hikes and uncertainty with regards to Pakistan’s future in Financial Action Task Force (FATF) where the group meeting is expected to be concluded on 29th June. Pakistan would most likely remain on the Grey List for some time till it addresses the raised issues where categorization on Black List is highly unlikely. The official press release on conclusion of OPEC’s meeting will determine the course of international oil prices and local Oil & Gas Exploration returns, he added.

Published in Daily Times, June 24^th 2018.