KARACHI: The KSE-100 stocks endured another turbulent week with the index plummeting 942 points or 2.1% week-on-week to fall at the 43,595 level.Anxiety over political and economic situations ahead of the upcoming general elections took toll on investors as participation remained thin and selling continued unabated.
Deterioration in ties with the US also added to market woes as Pakistan, in a tit-for-tat move, imposed travel restrictions on American diplomats in the country. Uncertainty and the market’s reaction to budget measures meant the index finished at an eight-week low, according to Topline Securities. Participation remained dull during the week with average daily traded volumes increasing only 1% to 167 million, while value traded rose 3% to $56.7 million.
In terms of sectors, banks remained the major laggards, dragging the index down by 286 points. Continuation of super tax and weak earnings outlook for 2018 kept stocks under pressure. While the finance minister assured the sector that the ministry will consider rationalising taxes, continued foreign selling kept a lid on stock price recovery. The cement sector also remained in the limelight as manufacturers raised prices by Rs15/bag to pass on the impact of higher input cost. Despite the increase, the sector caused a 137-point loss to the index.
Other sectors that contributed to the decline were; power generation and distribution (126 points), oil and gas marketing companies (69 points) and engineering (54 points).
On the flip side, oil and gas exploration sector stood out as it returned 1.5% week-on-week on higher crude oil prices. WTI/Brent rallied 2.4% week-on-week/3.4% week-on-week, respectively, as US President Donald Trump announced to withdraw from the Iran nuclear deal and enforce new sanctions on the country, leading to concerns that global oil supply could be squeezed.
Scrip-wise, major laggards during the week were HBL (-89 points), UBL (-79 points), LUCK (-76 points), HUBC (-70 points) and SNGP (-60 points). Whereas support to the benchmark stemmed from PPL (+60 points), POL (+39 points) and EFERT (+15 points).
Foreigners offloaded stocks worth of $4.1 million compared to net buying of $0.6 million last week. Major foreign divestment was witnessed in commercial banks ($8.9 million) and cements ($3.4 million) while on the local front, major accumulation was reported by mutual funds ($4.2 million), other organisations ($3.9 million) and insurance companies ($3.7 million).
Among major highlights of the week were; trade deficit widened 14% to $30.2 billion in Jul-April, overseas Pakistanis remitted $16.25 billion in ten months, SBP’s foreign exchange reserves fell 3% to stand at $11.2 billion, LNG-based power plant Haveli Bahadur Shah started running at highest efficiency and urea prices increased by Rs100/bag.