KARACHI: Pakistan Equities (KSE-100) rose by 0.66% or 272 points WoW to close at 41,661 points level. Average daily value traded improved by 2.1% WoW to USD 72 million, however average daily volume traded declined by 8.5%WoW to 214 million shares. During the week, Brent Crude declined by 3.3%WoW and is currently trading at USD67.7/bbl. The decline came on the back of United States of America granting waivers to eight countries on oil imports from Iran. Moreover, anticipation of smooth oil supply from OPEC and Russia further brought the commodity lower. A decline in oil prices bodes well for Pakistan where the annual energy import bill is almost as high as the entire Current Account Deficit. On economic front, State Bank of Pakistan’s (SBP) foreign exchange reserves declined by 2.5%WoW to USD 196 million to USD 7.5 billion as at November 9, 2018, setting a new four-year low. The decline came on the back of debt servicing and other official payments. Total liquid forex reserves held by the country stood at USD13.8 billion. During the week, MSCI announced the results of its Semi-Annual Review where there were no surprises as Lucky Cement (LUCK) and United Bank (UBL) were removed from the Standard Emerging Markets Index and downgraded to the MSCI Small Cap Index owing to reduction in their market capitalizations. Similarly, Honda Atlas Cars (HCAR) and Maple Leaf Cement (MLCF) were removed from the Small Cap Index – again no surprises there as they were both already flagged by us. Amongst the listed sectors, Commercial Banks, Cements and Chemicals remained the major drivers contributing 193pts, 94pts and 42pts (71%, 35% and 15%) to the benchmark Index, respectively. In terms of returns, Synthetic & Rayon, Chemicals and Cements remained top sectors returning 14.9%, 6.7% and 2.6%WoW, respectively during the outgoing week. The Synthetic & Rayon sector performed on the back of improved PSF prices (local PSF prices during Nov-18TD are up 41.6%YoY). Foreign selling for the week stood at USD 24.1 million Aas againts USD 9.4 million last week – with the bulk of selling concentrated in Cement and Banking sectors (likely due to aforementioned MSCI announcement). Amongst domestic investors, Companies and Domestic Mutual Funds remained net buyers and mopped up shares worth USD 9.8 million and USD 4.7 million, respectively. The last two weeks can largely be termed as consolidation, which was much needed post a sharp rally of 15% from mid-October. Sustainability of the momentum will now largely depend on the conditions laid down by IMF for the economic managers of the country. So far, the news flow emerging out of the ongoing IMF Staff Delegation meetings continues to hint towards the need for increased taxation, further hikes in energy tariffs, privatization of state owned enterprises and reduction in inefficiencies from the energy chain. Amidst this backdrop, we feel some profit-taking can be seen over the coming weeks, said Elixir Research Department’s research report. Published in Daily Times, November 18th 2018.