Stock market at a glance

MARKET REVIEW

The week started off on a positive note as market participants initially interpreted the JIT report to be not as damaging. However, index shed 4.7% next day as more clarity emerged on discrepancies identified in evidence provided by ruling party. The local bourse remained volatile on expected hearing by Supreme Court on Panama-gate, scheduled next week. The market went down 2.0%WoW to close at 44,337 points level. Foreigners remained net buyers in the week with a net FIPI inflow of USD1.0mn. However, trading activity in the week picked up with ADT and ADTV witnessing an increase of 5.2%WoW and 7.8%WoW.

During the week, APCMA released cement offtake for Jun-17, closing FY17 at ~41mn tons (89% utilization). The monthly sales during Jun-17 declined 19.6%MoM on the back of usual reduction in construction activities during Ramadan. Additionally, PAMA also reported monthly auto sales numbers where volumes of passenger cars sales increased by 2.5%YoY while tractor sales increased by 62%YoY in FY17. On the other hand, KEL unveiled its plan to develop a 900MW LNG-based power plant at its Bin Qasim site at an estimated cost of USD1.0bn with expected commercial production by mid of CY18.

On macro front, Pakistan’s trade deficit surged nearly 37%YoY to an all-time high of USD32.6bn in FY17 mainly on account of mounting imports and depleting exports. Remittances also showed a decline of 3.08%YoY to USD19.3bn in FY17.

OUTLOOK

Going forward, market direction will be followed by stance of Supreme Court in relation to JIT report. We advise investors to remain cautious and maintain exposure in high yielding value stocks.

ECONOMIC HIGHLIGHTS & DATA POINTS

Remittances record first annual dip in 13yrs (Dawn): Remittances declined 3.08% to USD 19.3bn in the last fiscal year, sending a warning signal to the government that already faces tough challenges on the external front.

Trade deficit widens by 37%YoY to USD32.5bn (Dawn): Pakistan’s trade deficit in merchandise edged up nearly 37% to an all-time high of USD 32.58bn in 2016-17 because of falling exports and rising imports.

SECTOR AND CORPORATE HIGHLIGHTS

Wait ends as JIT submits report today (Thenews): The wait comes to an end as the Joint Investigation Team, probing the Sharifs money matters, will submit its final report to the Supreme Court of Pakistan on Monday amid serious apprehensions of the ruling PML-N.

Cement’s domestic demand declines by 19.62% in June (BR): The cement industry closed the fiscal year 2016-17 on a sour note as the domestic demand declined steeply in June by 19.62% which was almost double than the decline of 10.95% in exports.

Moody’s affirms Pakistan’s credit rating, but warns of political risk (Thenews): Rating agency Moody’s Investors Service affirmed Pakistan’s B3 issuer and senior unsecured ratings and maintained its stable outlook on continuing economic reforms, however it said political risk represents ‘a significant constraint on the rating.

Bank deposits up 19% in June, highest in six years (Thenews): Bank deposits rose 19% to PKR 11.9trn in June, highest in six years, aided by higher money supply growth. Bank deposits stood at PKR 10.060trn in the same month of the last calendar year.

K-Electric announces fresh USD1.0bn investment (Tribune): The Karachi-based integrated power company, KE, unveiled a plan on Monday to develop a 900MW LNG-based power plant at its Bin Qasim site at an estimated cost of USD1.0bn, a project that includes simultaneous upgrade to associated transmission infrastructure.

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STOCK MARKET SYNOPSIS
	LAST WEEK	THIS WEEK	% CHANGE
Mkt. Cap (US $ bn)	87.4	86.4	-1.1%
Avg. Dly T/O (mn. shares)	166.0	174.7	5.2%
Avg. Dly T/O (US$ mn.)	85.6	92.3	7.8%
No. of Trading Sessions	5.0	5.0	0.0
KSE 100 Index	45,222.2	44,337.4	-2.0%
KSE ALL Share Index	31,712.3	31,097.0	-1.9%