MARKET REVIEW
After a long weekend, the index started off on a bearish note shedding 1.4% in the first two days. However, the feel good factor returned in the final two trading sessions where the market gained 2.6% to close at 49,851 points level and returned 1.1%WoW on the closing basis. Foreigners remained net sellers during the week with a net FIPI outflow of USD19.2mn. The foreign selling was largely absorbed by local individuals who reported a total buy of USD27.8mn. Trading activity however remained lackluster with average volume traded decreasing by 26.4%WoW while average value traded also decreased by 19.9%WoW.
During the week, Pakistan Bureau of Statistics (PBS) released inflation for the month of Apr’17 which clocked in at 4.8%YoY, slightly higher than the consensus estimates on the back of higher MoM inflation in the prices of perishable items; consequently the 10MFY17 average inflation to 4.73%. We expect the full year inflation to average below 5%, well below the SBP target of 6%.
OUTLOOK
Going forward, market fundamentals would take prominence with pre-budget proposals being the key sentiments driver. Also, with Pakistan’s classification into MSCI-EM in the current month (May’17), foreign activity may pick up in the coming weeks.
 NEWS THIS WEEK
ECONOMIC INDICATORS & DATA POINTS
GOVT. TO KEEP PRICES OF PETROLEUM PRODUCTS UNCHANGED FOR MAY (DAWN): Finance Minister Ishaq Dar on Sunday announced the government will keep the prices of petroleum products unchanged for the month of May.
INFLATION EASES BY 0.1 PER CENT(DAWN): Consumer inflation fell to 4.8 per cent in April from 4.9pc in the preceding month on the back of a slight decline in prices of non-perishable products.
TELECOM SECTOR SEEKS REDUCTION IN WITHHOLDING TAX (DAWN): At a time when the government is giving final touches to proposals for the upcoming budget, the telecom sector is seeking reduction in withholding and sales tax rates in a bid to provide relief to subscribers.
JAPAN TO PROVIDE $24M FOR BURHAN-ISLAMABAD TRANSMISSION LINE (TRIBUNE):The country’s first dirty cargo terminal — Pakistan Japan will provide $24 million to Pakistan for Burhan-Islamabad transmission line, and an agreement to this effect was signed in Islamabad on Thursday.
SECTOR AND CORPORATE HIGHLIGHTS
ZERO-RATING FACILITY MAY BE WITHDRAWN: EXPORT-ORIENTED SECTORS FACE GRIM PROSPECT (BR): The government is likely to withdraw sales tax zero-rating facility granted to five export-oriented sectors in federal budget 2017-18 as revenue loss has been calculated at Rs 15 billion.
K-ELECTRIC PLANS TO INSTALL 900MW LNG POWER PLANT (THE NEWS): K-Electric (KE), the country’s only vertically-integrated power company, planned to install a 900- megawatt of liquefied natural gas (LNG)-based electricity generation plant in place of an outdated oilrun 420MW plant at its Bin Qasim site, a company’s official said.
DIRTY CARGO TERMINAL HANDLES FIRST VESSEL (DAWN): The country’s first dirty cargo terminal — Pakistan International Bulk Terminal (PIBT) — has started its operations by handling its maiden coal cargo vessel of more than 41,000 tonnes.
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STOCK MARKET SYNOPSIS
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LAST WEEK
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THIS WEEK
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% CHANGE
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Mkt. Cap (US$bn)
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93.8
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94.0
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0.1%
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Avg. Dly T/O (mn. shares)
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358.5
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263.8
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-26.4%
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Avg. Dly T/O (US$ mn.)
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169.5
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135.8
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-19.9%
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No. of Trading Sessions
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5.0
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4.0
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1.0
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KSE 100 Index
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49,300.9
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49,851.1
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1.1%
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KSE ALL Share Index
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34,010.8
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34,144.3
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0.4%
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