MARKET REVIEW
The Index continued its downward trend in the week as building political noise and yet another regulatory action taken by SECPagainst a broker kept the sentiments negative. Index closed the week at 47,889pts, down by 0.7%WoW. FIPI registered net outflow of US$9.3mn. Average volume traded decreased by 37%WoW while average value traded decreased by 27%WoW.
During the week,data released by All Pakistan Cement Manufacturer Association (APCMA) depicted 23%YoY growth in total local dispatches in Mar’17. Impressive growth was primarily on account of deferred demand due to elongated winters. Additionally, SSGC’s board announced its investment plan for LNG-III project with an estimated expenditure of PKR65bn. As per our back of the envelop calculations, the earnings impact of the project (net of finance cost) comes to PKR3.4bn (EPS: PKR3.9). Furthermore, Premier Cement Limited (a wholly owned subsidiary of Sapphire Fibers), having received a prospective mining lease license stated its plan to set up a cement plant in KPK however, the quantum of expansion, sources of financing and timeline are yet to be disclosed.
On the macro front, revenue collection witnessed a 14.6%YoY growth amounting to PKR340bn in Mar’17. However, 9MFY17 collection numbers grew 7.9%YoY, significantly lower than target of 16% exerting pressure on fiscal deficit. Also, CPI for the month of Mar’17 clocked in at 4.94%YoY with 9MFY17 average reaching 4.01%YoY.
OUTLOOK
The market exhibited strength in the last trading session of the week backed by recovery of international oil prices. Furthermore, the result season aheadwill dictate market performance. Our top picks are PPL, OGDC, BAHL, HBL, EFERT, PSO, PIOC, MUGHAL and DGKC.
NEWS THIS WEEK
ECONOMIC INDICATORS & DATA POINTS
RESERVES DROP BY USD245.4MN (DAWN): Pakistan’s total liquid foreign exchange reserves amounted to USD21.5bn on March 31, down USD245.4mn.
ABD FORECAST 5.5% GDP GROWTH FOR FY18 (DAWN): Asian Development Bank projects that Pakistan’s GDP growth is expected to edge up to 5.2 per cent in FY17, and 5.5p% in FY18.
FISCAL DEFICIT WIDENS AS IMF WARNS OF CHALLENGES AHEAD (DAWN): Fiscal deficit for FY17 is now projected to reach 4.1% of GDP. IMF Mission Chief Harald Finger has predicted that the current account deficit could reach 2.9% of GDP.
FBR MISSES TAX TARGET BY RS10BN (DAWN): Government has set a revenue collection target of PKR3,620.8bn for FY17. Hence FBR will have to collect revenue to the tune of PKR1,362.8bn in the next three months to achieve its annual target.
CONSUMER INFLATION NEARS 5% (DAWN): CPI inflation for the month of march rose to 4.9% YoY on the back of increase in prices of petroleum and perishable products.
SBP PREDICTS 5-6% ECONOMIC GROWTH IN CURRENT FISCAL YEAR (TRIBUNE): SBP has anticipated real GDP growth in FY17 to be in the range of 5-6%, higher than last year’s 4.7%.
SECTOR AND CORPORATE HIGHLIGHTS
CEMENT SALES CLIMB TO 30.3MN TONNES (DAWN): Cement dispatches soared to record 30.304 mntonnes during 9MFY17, up 7%YoY.
PSX SUSPENDS AMCAP SECURITIES TERMINALS (DAWN): PSX has suspended all trading terminals of AMCAP Securities Ltd on violating clauses of the bourse’s rule book, including clients’ assets segregation and inaccurate bookkeeping.
FOOD FIRM INTENDS TO TAP HYDROPOWER POTENTIAL (THE NEWS): Ismail Industries Limited, a leading confectionery firm, has expressed interest in generating hydropower of an estimated 40.1MW in Khyber Pakhtunkhwa.
TEXTILE PACKAGE DISBURSAL TO START SOON (THE NEWS): Commerce minister has said that the first installment of the PKR180bn textile incentive package will be disbursed in the coming few days as funds have been released for the purpose.
MINISTRY OF PETROLEUM AND NATURAL RESOURCES FOR EARLY RECOVERY OF RECEIVABLES (RECORDER): Ministry of Petroleum and Natural Resources has approached Cabinet Committee on Energy for early recovery of PKR340bn receivable of PSO, OGDCL, SSGCL, SNGPL and PPL.
SHC SANCTIONS MERGER (RECORDER): Sindh High Court has sanctioned the merger of Byco oil and Byco terminal with Byco Petroleum Pakistan with effect from June 30, 2016.
PLANNING MINISTRY SEEKS PKR1,000BN AS PSDP ALLOCATION FOR FY18 (THE NEWS): Minister for Planning has asked the finance division to allocate PKR1,000bn for PSDP in the next budget, instead of PKR700bn as indicated by the division through an indicative budget ceiling.
PSMCL ON SATURDAY INCREASED THE RETAIL CAR PRICES (DAWN): PSMC raised the price of WagonR by PKR25,000 and Mehran by PKR5,000.
SECP FILES CRIMINAL CASE AGAINST BROKER (DAWN): SECP has filed a criminal complaint against the CEO of Cedar Capital and his two clients for manipulating the share price of Pak Electron Ltd.
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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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91.5
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90.8
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-0.8%
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Avg. Dly T/O (mn. shares)
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248.6
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155.7
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-37.4%
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Avg. Dly T/O (US$ mn.)
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108.8
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80.0
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-26.5%
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No. of Trading Sessions
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5
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5
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–
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KSE 100 Index
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48155.9
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47889.4
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-0.6%
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KSE ALL Share Index
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32985.4
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32871.4
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-0.3%
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