EUR 13.06 For Business Accounts Only

AKD STOCK SMART, Dec 08, 2017

StockSmart                       

Weekly Review

The tribunal’s report on Model town incident, though initially ignored by the market, later on sent shockwaves within the investor community ramming the index into a heavy red zone. Followed by various parties vowing to take a stand against the accused, the benchmark index shed 930pts (down 2.33%WoW) closing the week at 39,080pts. Furthermore, OGRA’s adamant stance towards the implementation of proposed tariff regime for gas utilities dragged SNGP/SSGC down by 12.7/12.3%WoW while PSO/KAPCO slid 7.26/13.94%WoW as news circulated regarding PSO suspending fuel oil imports further aggravated by the resumption of second LNG terminal (after a brief breakdown). Despite the negativity, PSMC rallied 4.4%WoW as the auto assembler announced the launch of 4 new products including the auto gear shift version of Cultus and Mega Carry. In this scenario, investors preferred to play with small cap scrips where 1) WTL (69.33mn shares), 2) KEL (57.87mn shares), 3) TRG (52.88mn shares), 4) JPGL (43.09mn shares) and 5) ANL (30.32mn shares) lead the board pushing overall volumes up by 8.74%WoW to 141.27mn. Other highlights of the week were: 1) US defense secretary Mattis meeting the high-ups of Pakistan acknowledging the efforts of Pakistan against war on terror, later re-iterated by the Pentagon’s statement as well, 2) PSX proposing to widen existing scrip-level circuit breakers (CBs) to maximum 15%, 3) Sindh notifying an additional subsidy of PkR9.3/kg on sugar exports, 4) (CPI) going up 3.97%YoY in November and 5) Foreign reserves jumping to US$21bn after the country received US$2.5bn through auction of Sukuk and Eurobond. Performance wise, scrips (from AKD universe) leading the bourse were: 1) PSMC (+4.40%WoW), 2) PPL (3.90%WoW), 3) NCL (1.52%WoW), 4) NML (+0.89%) and 5) POL (+0.77%WoW), while laggards included 1) KAPCO (-13.94%WoW), 2) FCCL (-9.62%WoW), 3) PSO (-7.26%WoW), 4) EFOODS (-6.62%WoW) and 5) ASTL (-6.06%). Foreigners gathered stocks worth US$1.04mn during the week, as against a heavy outflow of US$39.54mn last week.

   

Outlook

Movements on the political front with formation of alliances against the incumbent party may further weaken investor confidence going forward. Apart from this, market will react to auto numbers due to be released next week by PAMA. On the international front, FOMC meeting is scheduled on 12/13th December where its hawkish stance might create further pressure on the sustainability of PkR/US$ parity at its current levels.

  AKD Research