The KSE-100 index displayed a positive trend during the week, closed in green on 3 out of the 5 trading sessions and ending at 39,306 (+0.66% WoW). News flow regarding the upcoming mini-budget aided sentiments at the domestic equity bourse with suggestions by stock brokers being particularly encouraging; abolishment of 0.02% advance tax, exemption of tax on dividends for stocks held over 3 years and losses to be carried forward for up to 3 years.
Positive contribution to the index was led by Fertilizer (135pts) with the GIDC issue expected to be resolved, Oil & Gas Exploration Companies (55pts) amid potential hydrocarbon discovery at the offshore location by Exxon, ENI, OGDC and PPL, Tobacco (25pts), Power Generation and Distribution (23pts), and Technology and Communication (20pts).
On the flip side, sectors under pressure remained i) Cement (17pts) given anticipation of higher FED to be imposed under the upcoming budget, ii) Automobile Parts and Accessories (15pts), and iii) Refinery (8pts). Scrip wise top contributors were PPL (74pts), FFC (65pts), ENGRO (40pts), OGDC (38pts) and PAKT (25pts).
Foreign selling continued this week clocking-in at USD 9.4mn compared to a net buy of USD 0.6mn last week. Selling was witnessed in all other sectors (USD 3.2mn) and Exploration & Production (USD 2.8mn). On the domestic front, major buying was reported by Individuals (USD 7.3mn) and Mutual Funds (USD 3.72mn).
Volumes during the week settled at 118mn shares (down by 15% WoW) whereas value traded arrived at USD 40mn (down by 14% WoW). Other major news SBP’s forex reserves slip below $7 billion, July-December FDI down 19 percent YoY, Current account deficit sharply widens 37.3 percent to $1.660 billion in December, Withdrawal of customs duty, additional customs duty and sales tax on import of cotton, Hi-Tech Alloy Wheels to issue 150m shares.
Analysts at Arif Habib Limited said that the government is set to present another mini-budget for FY19 next week January 23, it is expected that the market trajectory to imitate news flow.
Moreover, Prime Minister Khan continues traveling to friendly countries (Qatar) as well as receive dignitaries to fortify relations with allies and build the FX position.