EUR 8.14 For Business Accounts Only

AKD STOCK SMART

Weekly Review

Rejoicing over the amnesty scheme and announcement of US$3.285bn to be lent by International Trade Finance Corporation, KSE-100 ended yet another week in the positive territory, gaining 1,078pts (2.36% WoW). Participants largely ignored concerns raised by the Parliamentary committee over the recent delimitation exercise which could potentially lead to a delay in elections. On the other hand, Central Bank’s decision to maintain status quo on policy rate (against the market expectations – consequently hitting the banking sector) incited rally in the sectors pursuing expansion: mainly cement and steel , where further support was provided by news of cement price hike, while possible removal of Regulatory duties on steel marred the show later in the week. Average Traded volumes went up by 8.19%WoW to 259.37mn shares led by EPCL (84.85mn shares), LOTCHEM (77.26mn shares), FCCL (63.68mn shares), KEL (61.02mn shares) and NRSL (43.44mn shares). Major news highlights included: 1) Central Bank’s decision to maintain policy rate at 6% citing that the impact of recent policy measures are yet to unfold, 2) annual consumer price inflation clocking in at 3.2%YoY in Mar’17, 3) commerce division considering further reduction in custom duties on raw materials and removing regulatory duties on 57 tariff lines, 4) budget proposals flowing in where SECP proposed a flat rate of 15%/20% CGT for filers/non-filers for holding period of up to 3 years and Pakistan Banks’ Association pushing to abolish the super tax, and 5) foreign reserves declining by US$152mn over the week to stand at US$17.796bn on Mar 30’18. Outperformers of the AKD universe include 1) MLCF (+11.62%WoW), 2) POL (+8.73%WoW), 3) FCCL (+6.72%WoW), 4) INDU (+5.95%WoW) and 5) APL (+5.58%WoW), while FATIMA (-1.83%WoW), 2) KEL (-1.43%WoW), 3) ASTL (-0.33%WoW), and 4) KAPCO (-0.11%WoW) remained the laggards. Foreigners continued their buying spree with US$3.62mn worth of inflows vs. US$1.91mn in the previous week.

Outlook

Having shown an initial upward momentum, market will likely take direction on further developments over amnesty scheme (still awaiting the presidential ordinance) where major political parties have shown reservations on the possible misuse of the same. Moreover, progress on the hearings of objections on delimitation exercise will closely be tracked along with investors keeping an eye on proposals relating to the upcoming budget. Positive outcomes on these fronts can drive performance accordingly.