Investors eye political cheer line to keep up euphoria

Oil-supported equity market continued to give a stellar performance during the outgoing week with a positive closing in each of the four sessions, dealers said. 

Analysts expect the momentum to continue during the next week with main board shares continuing to take the lead. They, however, said investors will be cautious over the political situation with opposition alliance on the Panama issue in the making. PSX divestment news will be positive for the market next week.

Analyst Faizan Ahmed at JS Global said Pakistan Stock Exchange (PSX) continued to trend up in spite of an unabated foreign selling ($47 million) during the week.

“Most of the strong rally in the stocks can be attributed to continued interest from local mutual funds as their buying spree continued during this week as well with a net buying of $29 million,” Ahmed said.

Individuals, however, remained skeptical of the Index levels and continued to book profits at fresh highs recorded during the week.

PSX’s KSE 100-share Index gained 2.63 percent or 1197.3 points to end the week at 46,584.53 points. KSE 30-share Index rose 3.01 percent or 736.43 points to close at 25,183.86 points.

Average daily volumes decreased nine percent to 358 million shares/day. Foreigners remained net sellers of equities worth $46.8 million during this week.

Analyst Fahad Qasim at Topline Securities said positivity was seen on the back of recovery in global oil prices after the agreement between the member nations of the Organisation of the Petroleum Exporting Countries reached on a supply cut and a strong liquidity position of local investors.

“Top three gainers over the outgoing week were E&P (exploration and production), pharmaceuticals and power generation companies, which were up 9.8 percent, 5.1 percent and 3.1 percent, respectively,” Qasim said. BIPL Securities, in a report, said a successful PSX stake sale bidding process and increase in oil prices proved to be a strong stimulus. 

“Depreciating yen – down 2.3 percent – bodes well for margins of the automobile sector. So, the sector posted positive returns,” it said. “Pak Suzuki emerged among the top gainers as it announced its plan to set up a new plant if government agrees to provide similar concessions that are provided to new entrants.”

HUBCO gained traction after it notified that its subsidiary received permission to set up a 330-megawatts coal-fired power plant. 

Government’s decision to reverse the gas price cut turned investor attention to SSGC with the gas utility’s stock performing in the last session. Fecto and Kohat Cement expressed interest in participation in the bidding process of Dewan Cement’s plant – a news that augured well all the three shares.

The activity mostly remained in the main board stocks with financials and E&Ps contributing most towards the index’s northward march.

Remittances to Pakistan decreased 2.45 percent to $7.87 billion in the July-November 2016/17. Remittances from Saudi Arabia increased, while a decline is witnessed in remittances coming from other parts of the world. Foreign direct investment fell 45 percent to $460 million in the first five months, signaling an alarm for the external account position. Pakistan Deep Water Container Port, the country’s biggest port, started test operations by accommodating the first container ship, APL Japan