Lahore

The overall sentiments remained volatile during the week due to uncertainties and lack of triggers in the market. Dull activity and bearish sentiments from last week prevailed at the start of the week but the market recovered during the latter half with an upturn in international oil prices. In response to recovering oil prices, index heavyweight Oil & Gas sector staged a recovery which provided much needed impetus for broad based improvement during the second half of the week. Concerns attached to continuity of strong profitability of key sectors such as cements (+0.3 percent WoW) and banks (+0.1 percent WoW) kept bulls on a leash during the first half of the week but fizzled out as results came out better than expectations. Other major sectors such as autos and chemicals also showed similar trend and apparently mimicked performance of the oil & gas sector with average traded volume of the market also inching up by 11.5 percent WoW.

Experts said that the local bourse took a breather this week because investors cherry picked stocks in select sectors on attractive valuations. Resultantly, benchmark KSE-100 index rose 0.9 percent to close at 31,294 index level.

Average daily volume increased by 12 percent to 138.2mn shares while average daily value fell by 6 percent to Rs6.2bn/US$59.5mn.

On a sector level, Oil & Gas, Multiutilites and Tobacco were among the major gainers increasing 3.2-5.5 percent over the week. General Industrials and Food Producers were major losers having declined 6.0 percent and 2.6 percent in the outgoing week.

Foreigners were net sellers of US$4.8mn during the week. They were net buyers in Oil & Gas and Cement sector with US$1.9 and US$1.1mn, respectively, whereas net selling of US$1.9mn was seen in Banks and US$0.9mn in Electricity sector.

FXTM Research Analyst Lukman Otunuga commenting on Stock markets, observed that global stock markets briskly surrendered their gains during the week amid the steep decline in oil prices which effectively diminished investor confidence towards the global economy. Asian stocks were left battered and depressed following China’s Central Bank’s heavy depreciation of the Yuan while the strengthening of the Yen punished Japanese shares dragging them into red territory. Lukman Otunuga pointed out that these losses seeped into the European markets which were already pressured by risk aversion and poised to trade lower when the latest German Ifo survey pointed to a decline in moral for February. American markets followed the same negative trajectory, as investors digested the reality of the current unfavourable economic landscape.

“It is becoming increasingly clear that the elevated concerns over the state of the global economy have manufactured a highly sensitive trading environment which continues to be dictated by violent swings in the oil markets. With anxieties towards the ongoing global turmoil still heightened and further declines in oil prices expected, stock markets may be left vulnerable and set for more pain as jittery investors systematically scatter away from riskier assets,” he added.

During the week, Privatization Minister Mohammad Zubair stated that govt. received 7 bids for selling its stake in Faisalabad Electric Supply Corporation (FESCO), one of the power distribution companies on govt.’s privatization list. The process for sale, which was delayed due to strike of Pakistan International Airlines (PIAA) employees, will resume in 2 months time.

Pakistan Investment Bond (PIB) auction was held this week in which govt. raised Rs152.2bn against a target of Rs50bn. Cut-off yields for 3-year PIB stood at 6.34 percent (Rs63.1bn accepted), 5-year at 7.04 percent (Rs81bn accepted) and 10 year at 8.25 percent (Rs8.1bn accepted). No bids were received for 20-year PIBs.

Minister for Petroleum & Natural Resources announced that country will start receiving 400mmcfd RLNG from next month, according to news reports. He also stated that 1,000mmcfd RLNG will be included in the system by March 2017 and the capacity will be increased by 1,200mmcfd till then.

Habib Metropolitan Bank (HMB) announced 2015 results today in which bank reported consolidated profit after tax of Rs7.7bn (EPS Rs7.3), an increase of 55 percent YoY. Earnings were led by 28 percent YoY increase in net interest income to Rs14.4bn and 155 percent YoY increase in capital gain to Rs4.9bn.

According to news reports, Zameen.com, a property portal in Pakistan, has launched a property index, the first in the country and in the South Asian region. The index provides real-time prices with regards to per square-foot rates of properties in Karachi, Lahore, Islamabad, Faisalabad and Rawalpindi.