Pakistan stocks end week with strong gains

Pakistan Stock Exchange (PSX) rallied to gain over one percent during the week ended March 24, 2017, shrugging off political nerves and a bearish international crude oil market, primarily drawing strength from a revival of risk-laced investment activities, brokers said on Saturday. 

Faizan Ahmed, in a report issued by JS Global, said market continued to display a jittery picture during the week, although it closed the week 1.2 percent higher. 

“Average daily volumes showed an improvement of 39 percent rising to 258 million shares a day. However, they remained well below the average daily volumes of 376 million in fiscal year 2016-17, showing investor's nervousness over the past few weeks when all eyes were fixed on expected Supreme Court ruling in the Panama-gate case," Ahmed said in the report.  The KSE-100 shares index gained 1.16 percent or 561.7 points to close the week at 48,971.05 points, while KSE-30 shares index surged 0.83 percent to end at 26,173.50 points. 

Foreigners turned net buyers in the outgoing week, mopping up 3.47 million worth of shares against net sell of $11.08 million in the preceding week.   According to an analyst at BIPL Securities, index broke its losing streak despite political pressures and low international oil price ending the week with a gain of over one percent. 

“National Electric Power Regulatory Authority (NEPRA) cut the average electricity tariff for K-Electric by Rs3.50/unit for the next seven years, doing away with the utility’s monopoly. However, it also revised K-Electric’s benchmark transmission and distribution (T&D) losses curve. KEL’s management termed the new multiyear tariff as detrimental to long-term investment and is expected to file a review petition," the BIPL analyst added.

During the week, Searle Pakistan (SEARL), up 9.7 percent, remained the major market mover, contributing 77 points to the index, while Sui Northern Gas Pipelines (SNGP) hit the limelight over expectations of an expansion in pipeline infrastructure in the country. 

On the flipside, United bank (UBL), down 1.8 percent, and K-Electric (KEL) 5.2 percent, turned out to be the major laggards during the outgoing week with former declining over worries of management overhaul, while the latter turned red following the Nepra decision.  Additionally, the groundbreaking ceremony of Hub Power Company’s (HUBC) 1,320 MW imported coal project took place during the week, while fertilizer numbers released by National Fertilizer Development Centre (NFDC) for the month of February 2017 showed 18 percent decline in urea off-take. As a result urea inventory levels rose to 1.19 million tons.   On the macro front, large-scale manufacturing (LSM) grew by 3.48 percent in the seven months of the current fiscal year, whereas country’s Current Account Deficit (CAD) surged by 120 percent to $5.4 billion.   Moving forward, political noise and international commodity prices are still expected to impact the direction of the market.