MARKET REVIEW
Bears continued to dominate the index during the week as the index shed 1.7%WoW to close in at 48,156pts level. FIPI registered net outflow of USD19mn. Average volume traded decreased by 3.5%WoW while average value traded increased by 8.6% WoW.
Major developments during the week included government signing accords with World Bank worth USD433mn regarding the financing of multiple development projects. Also, WAPDA announced that it secured PKR144bn financing from the local banks for Dasu Hydropower Dam, which is expected to come online during CY20-21 and is expected to add 4,320MW to the national grid. Also, government and IPPs continue to remain at loggerheads. Resultantly, the gap between demand and supply of electricity has jumped up to around 5,500MW as per some news reports. Finally, the government is gearing up for the auction of the final 4G license at a base price of USD395mn. Ufone is expected to be the front runner for the acquisition. The bidding process is likely to be concluded before the end of FY17.
CPI inflation for month of Mar’17 is expected at 4.6% as against 4.2% it clocked in Feb’17 and 3.9% in Mar’16.
OUTLOOK
Political noise will continue to shape the direction of the index with the market expected to remain lackluster until the result of Panama case is announced. We advocate a cautious stance on the market. Our top picks are OGDC, BAHL, HBL, EFERT, PSO, PIOC and DGKC.
NEWS THIS WEEK
ECONOMIC INDICATORS & DATA POINTS
SBP KEEPS POLICY RATE AT 5.75% (DAWN): Monetary Policy Committee of the State Bank of Pakistan decided on Saturday to keep the policy rate unchanged at 5.75%.
SECTOR AND CORPORATE HIGHLIGHTS
PSMC WILL REVIEW ITS DECISION TO INVEST USD460MN (DAWN): PSMC will review its decision to invest USD460mn if the government fails to respond to its request for incentives until April.
MINISTRY SEEKS UP TO 20% TARIFF CUT FOR THAR COAL PROJECTS (TRIBUNE): Ministry of Water and Power has requested Nepra for up to 20% reduction in upfront tariff for new Thar coal-based power projects
IHC ORDERS REGULATORS OUT OF MINISTRIES’ CONTROL (DAWN): IHC has set aside a notification placing five regulatory bodies (Ogra, Nepra, PTA, FAB, PPRA) under their line ministries.
PROVINCES ASKED TO DELAY KHARIF SOWING (DAWN): Pakistan is heading towards a major water shortage of up to 35% and would delay crop sowing in early part of the Kharif season to partially cope with the situation.
KPK GOVERNMENT GIVES 14 LICENSES TO ESTABLISH CEMENT FACTORIES (TRIBUNE): KPK government has awarded licenses to 14 firms that will invest in the cement industry in the province.
GOVERNMENT MULLS DOUBLING BANKING TRANSACTION THRESHOLD TO PKR100,000 (THE NEWS): Government has agreed to double the minimum limit of daily banking transaction by non-filer to PKR100,000.
SUGAR EXPORT ALLOWED BY ECC (BUSINESS RECORDER): ECC of the Cabinet has allowed export of 0.2mn tons of sugar within a period of 60 days after the approval of export quota from the SBP.
PPIB SENDS LEGAL NOTICES TO 13 IPPS (BUSINESS RECORDER): PPIB has sent legal notices to 13 IPPs for giving an advertisement in the newspapers through IPPAC for allegedly violating Implementation Agreements
GOVT. SETS BASE PRICE FOR FINAL SPECTRUM AT AN AMBITIOUS $295 MILLION (TRIBUNE): Federal cabinet has set the starting bid price at $295 million, as it looks to shore up dwindling revenues through auctioning the spectrum.
WAPDA SECURES RS144BN LOAN FOR DASU PROJECT (DAWN): Wapda has secured PKR144bn loan for Dasu Hydropower Project by signing an agreement with a consortium of local major banks led by HBL
GOVT BEGINS SPLITTING GAS UTILITIES TO GET LOANS (TRIBUNE): Government has started the process of splitting public sector gas utilities in order to secure funds from ADB and World Bank
WB TO GIVE USD433MN TO PAKISTAN (DAWN): World Bank will provide USD433mn to Pakistan to support the financial sector, social protection and community development
OIL PRICES LIKELY TO RISE UP TO PKR13/LITRE (TRIBUNE): Ogra had proposed an increase of PKR2.28/litre for petrol, PKR2.04/litre for highspeed diesel, PKR13/litre for kerosene oil.
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STOCK MARKET SYNOPSIS
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LAST WEEK
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THIS WEEK
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% CHANGE
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Mkt. Cap (US$bn)
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92.0
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91.5
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-0.5%
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Avg. Dly T/O (mn. shares)
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257.8
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248.6
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-3.5%
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Avg. Dly T/O (US$ mn.)
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100.2
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108.8
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8.6%
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No. of Trading Sessions
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4.0
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5.0
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1.0
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KSE 100 Index
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48,971.1
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48,155.9
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-1.7%
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KSE ALL Share Index
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33,161.3
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32,985.4
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-0.5%
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