Daily Times

KSE-100 Index rose 0.8 percent or 337 points week-on-week (WoW) closing at 42,842 points. Benchmark Index remained range bound during the week where the results of Allied Bank (ABL), Engro Fertilizer (EFERT) and Aisha Steel (ASL) failed to garner significant interest as earnings were broadly in line with market expectations.

Market activity remained on the higher side though it was lower compared with that of previous Week. As such, average daily traded value stood at $ 78 million down 19% WoW and volume went down by 27% WoW to 208 million.

Among the economic developments, Islamic Development Bank (IDB) has agreed to extend $ 4 billion loan to Pakistan where the modalities and formal offer are expected to be made post the new government assumes office. In a separate development, British think tank EIU commented that Pakistan is unlikely to get bailout from IMF due to political resistance from both US and China.

Among the sectors, Cements remained the major index driver contributing 256 points (76%) with return of 6.1% WoW. Individually, Lucky Cement (LUCK) single handedly contributed 122 points (7%).

During the week Bloomberg reported that National Accountability Bureau (NAB) has started an inquiry into the awarding of an LNG terminal to Engro Corporation (ENGRO).

The probe will look into allegations of an “illegal award” of Pakistan’s first LNG terminal to Engro’s Elengy Terminal Pakistan Limited. The negative impact on the stock price was however short-lived as it closed up 2.9% for the week. Nishat Chunian (NCL) however lost 0.6% for the week and traded at its lower circuit on Friday after media reported that its Chief Executive has been summoned by the anti-graft agency next week.

Foreign Portfolio Investors turned aggressive sellers during the week and sold shares worth $ 38.6 million, a bulk of which was concentrated in Oil & Gas Exploration, particularly Oil & Gas Development Company (OGDC). Insurance Companies with $16.7 million and Mutual Funds with $ 10.4 million stood as the major buyers during the week.

The first session of the newly elected members of the National Assembly has been called on August 13, 2018; followed by Imran Khan likely taking oath as the Prime Minister on August 18, 2018. While this may keep the spirits high, reality check should soon follow as the PTI-led government prepares itself to tackle the growing twin deficits. At the same time, contagion from economic crisis in Turkey has started to spill over in European and Emerging Markets – a phenomenon, which if prolongs, can have its toll on Pakistan Equities as well, said Elixir Research Department’s research report.

Published in Daily Times, August 12^th 2018.