KARACHI: Overseas investors offloaded shares worth $ 51.9 million in the month of November 2017 meanwhile India managed to attract huge inflows amounting to $ 3,045 million for the same period.
Major foreign selling was witnessed in Fertilizer ($ 34.5 million) on account of exclusion of ENGRO from MSCI EM mid-cap, Commercial Banks ($ 20.6 million) and Cements ($ 6.9 million).
According to AHL Research report, during last week of the month, foreign selling was recorded at $ 39.54 million attributed to MSCI rebalancing. Regional data reveals that outflows were witnessed in other regional markets as well. Indonesia observed outflows of $ 1,376 million; Taiwan witnessed outflows of $ 1,351 million while Thailand outpouring amounted to $ 581 million.
Meanwhile, the equity market took a breather as the KSE 100 index posted a 1.0 per cent MoM return (+393 points) taking CY17TD / FY18TD return to -16.3 per cent / -14.1 per cent.
A major event during the month was the semiannual rebalancing of MSCI EM which was announced on November 14, 2017, and as a result, ENGRO was downgraded from the MSCI midcap to small-cap alongside effective deletion of three other scrips from the small-cap index (SHEL, FEROZ and PSMC).
To recall, the local equity bourse remained bullish at the beginning of the month amid uptick witnessed in international oil prices in wake of the power struggle in Saudi Arab, where eleven princes were arrested, including a prominent billionaire, and several other current and former ministers on account of corruption charges.
Additionally, buying was witnessed by mutual funds as the requirement for maintaining 5 per cent cash was withdrawn. Meanwhile, PM Abbasi inaugurated the second LNG terminal at Port Qasim in Karachi while refinery, OMCs and power sector remained under pressure as the government decided to close high-cost furnace oil-based power plants and switched to newly commissioned RLNG and coal-based power projects due to lower electricity demand during winters.
Last but not the least, the market celebrated successful issuance of Eurobonds and Sukuks worth $ 2.5 billion by Pakistan to bridge the shortfall in its Balance of Payments.
On the economic front, current account deficit for the month of October 2017 witnessed a growth of 20 per cent MoM to settle at $ 1,315 million.
Although exports progressed by 14 per cent MoM to $ 1,980 million, imports too depicted an ascent of 12 per cent to $ 4,442 million in said month. This took the 4MFY18 current account deficit to $ 5,013 million, registering a massive growth of 2.2x YoY and driven by a 26 per cent YoY jump in imports to $ 17,395 million vis-à-vis 11 per cent YoY increase in exports to $ 7,656 million.
Other events that occurred during the month include – circular debt at Rs 450 billion; government urged to renegotiate Iran-Pakistan project’s price; Pakistan to get $ 4.7 billion under ADB’s new business plan; textile exports up by 8 per cent in 4 months; ECC allows sugar exports of 1.5 million tones.
Average volumes during the month declined by 23 per cent MoM to 115 million shares coupled with average valued traded at $ 59 million (down 18 per cent MoM). On the local front, Companies and insurance companies remained the largest domestic accumulators with a net buy of $ 21/20 million, while banks and brokers remained sellers of $ 4 million and $ 2 million, respectively.