AKD Securities Limited – Stock Smart

Karachi, January 04, 2019 (PPI-OT): Weekly Review

Remaining devoid of any major trigger, the market had a turbulent first week of the New Year, with the wild intra-day moves. Gaining 929pts on the second trading session, the benchmark KSE-100 index erased some of the earlier gains in the following two trading sessions before closing the week on a positive note. Overall, the KSE-100 index gained 1.02%WoW to close the week at 37,547pts, up 380pts. Trading activity remained largely subdued with average daily trading volumes further declining to 106.95mn shares, down 3.1%WoW.

Key news flows impacting the market during the week were: i) Finance Minister Asad Umer hinting towards another fiscal adjustment, with likely announcement of mini-budget in mid Jan’19, ii) the gov’t officials reportedly announcing that the Chinese gov’t agreed to lend US$2bn to Pakistan for helping it boost dwindling foreign exchange reserves, iii) markedly below consensus expectations, monthly inflation reading for Dec’18 clocking in at 6.17%YoY compared to 6.5%YoY in Nov’18 and 4.57%YoY in Dec’17, iv) US President Donald Trump hinting towards a better relationship with Pakistan, eyeing meet-up with Pakistani leadership, and v) FX reserves held by central bank further dwindling US$170mn to reach at US$7.28bn during the week ended Dec 28’18.

Key performers over the week were: i) BAFL (+8.34%WoW), ii) CHCC (+5.25%WoW), iii) ENGRO (+5.22%WoW), iv) PIOC (+4.29%WoW) and v) HBL (+4.29%WoW), while laggards included: i) FATIMA (-6.48%WoW), ii) HASCOL (-4.86%WoW), iii) EFOODS (-4.75%WoW), iv) FFBL (-4.66%WoW) and v) NCL (-3.70%WoW). Foreigners remained net sellers, offloading US$0.51mn worth of equities, compared to US$1.1mn outflow in the previous week.