LAHORE: Development regarding Pakistan’s Sukuk and Eurobond issuance would closely be monitored at Pakistan Stock Exchange (PSX) that could potentially boost confidence in the week ahead in the continuously dull market performance, experts believe.
In addition, Oil and Gas sector may get limelight following the Organisation of Petroleum Exporting Countries (OPEC) and several non-OPEC nations led by Russia are scheduled to meet next week in Vienna to discuss a possible extension and deepening of oil production. Besides, sentiments in downstream oil stocks may get recovery as the government has given the positive nod for a classified resumption of production of power from furnace oil.
Experts believe that important development to watch out for is Pakistan’s Sukuk and Eurobond issue where strong participation and appetite for Pakistan’s sovereign debt, and consequent beefing up of forex reserves, could boost investor confidence in a dull environment where political jitters continued to shake market participants, resultantly the index slipped down to 596 to close at 40,248 points, amid lack of triggers and continued political uncertainty.
Additionally, the monetary policy announced by the central bank proved to be another non-event given market consensus on status quo on policy rate.
The government finally disclosed the status of the Finance Minister, however, the sit-in in the capital etc continued to create an environment of instability.
On the macro side, data points depicted a mixed picture. Pakistan’s LSM growth for Q1 fiscal 2018 was recorded at a robust 8.4 per cent on year on year basis, driven by automobiles, steel, and POL production. Pakistan’s current account deficit ballooned to over $ 5 billion against $ 2.3 billion against the same period last year, despite an 8 per cent textile exports growth.
In addition, S&P assigned a ‘B’ long-term rating to Pakistan’s upcoming Sukuk and unsecured notes issue. Market activity increased during the week and investors turned their attention towards 2nd tier and 3rd tier tags, as ADTO elevated 6 per cent elevating to 112 million shares despite a 6 per cent drop in ADTV to $ 48 million.
Significant investor interest was marked in K-Electric (KEL) and the scrip remained the volume leader during the week with the average of 116 million shares on the back of rumours of headway of its acquisition by Shanghai Electric Power Company.
Most of the major sectors such including commercial banks, cement, chemicals, oil and gas and food producers ended the week in the red zone with negative 1.5 per cent, 1.4 per cent, 0.9 per cent, 0.8 per cent and negative 8.2 per cent respectively.
At the same time as electricity, electrical and electronic goods and illiquid tobacco gained 1.9, 8.9 and 11.9 per cent during the week.
Foreign investors remained net sellers during the week by offloading $ 6.3 million of scrips where most of the selling was concentrated in cement for $ 3.7 million and commercial banks for $ 4.3 million. This was offset to some extent by buying in oil and gas for $ 5.1 million.
