Investors await triggers amid foreign outflows

Stocks market may lack triggers in the week ahead with small and mid-cap shares to be in the limelight much like the previous few sessions, while blue-chip investors will keep tracking foreign fund flows, dealers said. 

BIPL Securities (former KASB Securities), in a report, said it expects the market to continue range-bound movement with investors preferring selective buying. 

“Meanwhile, volumes are likely to be dominated by the sideboards,” the report said. “Any positive news from the geopolitical arena or local politics seems unlikely in the near term, keeping investors cautious.” 

The benchmark KSE 100-share Index of Pakistan Stock Exchange closed lower 1.22 percent or 524.18 points to 42,324.94 points during this week. The average traded volume fell 7.1 percent to 459 million shares, while average traded value decreased 24.8 percent week on week to $134 million a day.  Foreign institutional portfolio investment recorded an outflow of $46.96 million as against $27.47 million during the last week. Foreigners remained net sellers of $133 million worth of equities so far in 2016. Around $75 million of net selling was recorded during the last two weeks alone.

Topline Securities, in a report, said the benchmark index witnessed a dull week as investors remained cautious and preferred to book profits on continuous foreign selling for a consecutive 10 days. Uncertainty on local political grounds due to the ongoing Panama hearings dampened market sentiments.

Analyst Faizan Ahmed at JS Research said local banks and Individuals remained major buyers, absorbing most of the foreign selling during the week. Other key highlights of the week were talks of the Oil and Gas Regulatory Authority opening 200,000 new gas connections, Vitol's decision to increase stake in Hascol Petroleum, decrease in foreign investment in July-Oct, cut in statutory liquidity requirement for Islamic banks and reduction in urea price by Fauji Fertilizer Company. The government also ruled out a possibility of granting any tax amnesty to the real estate investors.  Generally, activities were concentrated in auto parts and accessories (up 6.3 percent), cement (up 5.8 percent) on ease in coal prices and banks (up 1.1 percent) with major activity in the third-tier banks. The major losers were power generation (down 1.9 percent) and autos (falling 1.8 percent).

Auto sector also inched down 0.6 percent. Exports of auto parts and accessories fell 29 percaxaent in the first three months of the current fiscal year of 2016/17 to $2.83 million. Indus Dyeing, Hascol Petroleum Limited, International Steel Limited, Pak Services and Nishat (Chunian) Limited were the major gainers, while Indus Motors, Associated Services Limited, Dawood Hercules, TRG Pakistan and United Bank Limited were the major losers.