LAHORE: Despite depleting foreign exchange reserves, Pakistan equities continued its positive trajectory for third consecutive week, gaining 530 points (+1.2 per cent) to close at 45,560 index level, primarily, since turbulent political noise is subsiding, foreigners are net buyers for the second consecutive week, and investor’s sentiment is improving on back of rising international crude oil and domestic cement prices.
Meanwhile, during March 2018, KSE 100 index gained 5.4 per cent after posting loss of 2 per cent during last month, where Banking sector alone contributed 845 points, led by buying from local insurance companies. Similarly, on the back of strong cement demand and rise in cement prices, cement sector added 466 points to the index, where foreigners remained net buyers of $6.3 million in the cement sector.
On quarterly basis, KSE 100 index posted a rise of 13 per cent, highest return after four quarters, last seen in 4Q2016 (+18 per cent) with the return of foreign buying amounting to $31 million, after selling for last six consecutive quarters, where last buying was seen in 2Q2016 amounting to $60 million. In 1Q2018, Banking Sector Index (BKTI) and Oil and Gas Exploration Index (OGTI) was up by 17 per cent and 6 per cent, respectively.
It is worth mentioning that analysts at Topline Securities highlighted Banking and E&P sectors as top picks in their Pakistan Strategy Report 2018, published in December 2017.
In other developments during the outgoing week, State Bank of Pakistan (SBP) announced the monetary policy for the next two months, where policy rate remained unchanged at 6 per cent.
Moreover, Jamshoro Power Company (JPC) announced that JPC and Siemens-HEI will develop Pakistan’s first supercritical coal-fired power plant in Jamshoro. The engineering, procurement and construction (EPC) contract for the first unit that has a capacity of 660MW was signed at a ceremony in Islamabad. A five-year operation and maintenance (O&M) contract was also signed.
WTI crude oil prices posted a biggest weekly gain in eight months, as they hit a 2-month high on surging geopolitical risk in the Middle East and prospects of an extension of OPEC-led production cut into 2019.
The government of Pakistan is all set to release its economic survey for the current fiscal year of 2018 on April 26 with annual growth estimated at up to 5.7 percent, while the document would also highlight poverty counts and financial losses of wars.
Pakistan Stock Exchange (PSX) has carried out its semi-annual KSE100 index re-composition exercise, where seven incoming companies are First Habib Modarba (FHAM), Pakistan Stock Exchange (PSX), Unity Foods (UNITY), Engro Polymers (EPCL), Agriauto Industries (AGIL), Archorma Pakistan (ARPL) and Systems Limited (SYS) replaced Allied Rental Modarba (ARM), Crescen jute (CJPL), Punjab Oil Mills (POML), Jubilee General Insurance (JGICL), Cherat Packaging (CPPL), Soneri Bank (SNBL) and Attock Cement (ACPL), w.e.f. April 02, 2018.
