AKD Securities Limited – Stock Smart

Karachi, December 07, 2018 (PPI-OT): Weekly Review

It was another difficult week for the market with KSE-100 index closing at 38,562.05pts, slipping 4.8%WoW. Unexpected interest rate hike of 150bps to 10.0% by SBP in post market hours on previous Friday caught investors off guard, and coupled with PkR currency depreciation triggered across the board selling on Monday (KSE-100 index was down 3.3%). And when the going gets tough, tough gets going! Oil prices receded 2.4%WoW in the run-up to the OPEC’s meeting as non-OPEC producers expand production, with pressure being exerted by OPEC’s decision to delay a final decision on output cuts, awaiting support from non-OPEC heavyweight Russia. Consequently, Oil and Gas sector lost 5.7% of its market capitalization during the week. The negatives overshadowed the improving relationship of Pakistan with the US, with the latter coming for assistance in negotiating settlement of the Afghan War.

Performance wise, top laggards in AKD universe were; i) APL (-13.88%), ii) HASCOL (-13.32%), iii) PIOC (-12.94%), iv) PSO (-12.47%), and v) PSMC (-11.22%). Volume leaders for the week were; i) KEL (65.37mn), ii) BOP (49.99mn), iii) LOTCHEM (44.37mn), iv) MLCF (43.23mn), and v) PAEL (37.13mn). Importantly, foreign selling subsided in the current week with FIPI standing at –ve USD2.5mn vs. –ve USD51.1mn in the previous week (USD32.6mn net selling on Friday, being the last day for MSCI rebalancing in the local market). Avg. volumes turned lower standing at 205.0mn shares (KSE All-share) vs. 278.2mn shares in the previous week whereas activity was tilted towards blue-scrips with KSE-100/KSE-All share traded value standing at 0.74x vs. 0.66x in the previous week.