Bears maintain dominance as KSE-100 index recedes 4.8% wow
Summary
Prime Minister Imran Khan revealing with his meeting on Monday with TV anchors and reporters that he came to know about dollar hike through television. This shows how much ill informed and lack of knowledge of the existing institutionalized mechanism has with the PM. This creates rumors in the market which Finance Minister had to remove about his resignation through an interview on AAJ TV on December 5. But the damage has already been done. Investors remained in state of uncertainty throughout the week.
The market lost 1,934 points during the week. The KSE-100 Index kept rotating between 39,000 and 38,000 to close on Friday at 38,562.05. The market capitalization decreased by Rs.282 billion and was Rs.7,782 trillion. The average volume improved from 152 million to 163 million shares this week. Unlike last week Mutual Fund were biggest seller in the market worth $21.23 million. The individual investors found the level attractive and were buyer throughout the week worth $12.12 million. The last week rupee devaluation and rate hike of unusual 150 bps carried its impact this week.
On Monday, the market opened with losing of 1,335 points after interest rate hike of 150 base points and interbank rupee rate increase to Rs.139.25 last week. Reserves held by SBP plunged by $560 to $7.5 billion during the week ending on November 30. The KSE-100 Index closed at 38,562.05.
On Tuesday, the market moved in the positive direction as Prime Minister assured mechanism being devised on Govt-SBP coordination on rupee-dollar parity and rate hike. The KSE-100 Index gained 261.42 points to close at 39,602.87. The CPI index for Nov’18 coming at 6.5% with expectation of 7,72 percent. The cement price increased by Rs.10 per bag.
On Wednesday stocks dip 299.76 points to close at 39,303.11. There were some negative news flow about Chinese support for balance of payments. The investors seems to be still skeptical about IMF program and slowdown in economic growth despite foreign buying on Wednesday.
The fear of economic growth, stable exchange rate , unclarity on IMF matter despite PM praising his economic team could not uplift the market on Thursday. The market lost 1,002 points to close at 38,300.63.
On Friday the investors found the market at oversold position good for cherry-picking. The individuals continued buying $2.22m and their total buying during the week was $12.12m. The Index climbed 261.42 points to close at 38,562.05.
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Participants/Activity
On average shares of 358 companies were traded. Of these 136 were gainers and 205 were losers and 17 remained unchanged.
Foreigners were net seller of $2.54m during the week; companies were buyer by $6.14m, Banks were buyer $4.24m; Mutual fund net seller 21.23m and individuals net buyers $12.12m.
Volume leaders during the week were: K-Electric 65m; Maple Leaf Cement 43m; Bank of Punjab 40m; Lottee Chemical XD 38; Pak Electron 30m; World Call Telecom 21 m; D. G. K Cement 14m; UBL Ltd 9m; Power Cement 8m; Fauji Cement 7 m.
Triggers
- SBP reserves down 7 percent to $7.5 billion as on Nov.30.
- Government decided to impose ban on furnace oil import.
- PPL makes another gas exploration at its well in Sujjawal, Sindh.
- Condition waived off for sugar millers to export sugar.
- Atlas Honda jacks up prices for sixth time.
Conclusion
Technically the RSI & the MACD have continued to decline supporting a bearish view. Any upside will find resistance in the range of 38,665-38,785 while a fall below will extend the decline towards 36,274.