Equities down

The Karachi equities declined by 0.1 percent, Week-on-Week (WoW), to close at 33,730 points on Thursday, last trading day of the week. The decline, analysts at Topline Research say, came after for the benchmark index''s continuous rising for a fourth consecutive week. The week under review saw daily share-trading at the country''s largest bourse averaging on 253 million, down 23 percent WoW.
The average traded value also stayed southward, 25 percent, to accumulate to Rs 12.6 billion. The off-shore investors stayed positive throughout the week with their $85.1 million net buying beating their $63.5 million net selling by $21.6 million.
Chemical, cement, oil and gas and electricity scrips attracted major foreign buyers who invested $8.1 million, $7.4 million, $2.5 million and $2.2 million in the respective sectors.
Local banks appeared as major net sellers of $13.2 million. The local investors bought positions mainly in tobacco, life insurance, automobile, beverages and chemical sectors growth in which ranged from two to eight percent, WoW.
Engro Corp and Engro Fertiliser both remained in limelight during the week, with average daily volume of 7.4 million shares, average traded value Rs 2.3 billion and 5.3 million shares (average traded value Rs458 million, respectively, since the private placement of Engro Fertiliser on April 29-30.
Interest was seen in medium sized banks as well, like Faysal Bank and Bank of Punjab, after they declared outstanding 1Q2015 results.
While following approval of KASB Bank''s amalgamation with BankIslami Pakistan, KSE suspended trading in KASB for two months.
The week''s gainers included EFU Life Insurance, Indus Motors, Pakistan Tobacco, Arif Habib Corporation and Murree Brewery while those lost were Archroma Pakistan, Pace Pakistan, TRG Pakistan, NIB Bank and Atlas Honda Pakistan.
"The KSE took a breather (13 percent gains over the last four weeks) to close down 0.1 percent," said Raheel Ashraf of JS Research.
However, the analyst said, some late excitement was witnessed at the bourse on the last trading day in anticipation of a rate-cut in the upcoming monetary policy.
This excitement was backed by 54-56 basis points drop in the T-bills cut-off yields in the latest auction.
"Strong corporate results failed to trigger any major excitement, though better-than-expected results in the auto sector garnered investor interest," Raheel viewed.
Key highlights of the week were: ADB hinting at more funds for local uplift projects, government likely to review tight gas policy, federal budget expected in the first week of June, Board of Engro Corp authorising sale of up to seven percent of Engro Fertiliser''s stakes through private placements and IFC agreeing to take up 20 percent stake in Elengy Terminal Pakistan Limited.
Going forward, analyst Abdul Azeem says, lower CPI figure would be a major trigger for the index.
The inflation would fall to 1.82 percent YoY level, lowest since July''03, he said.
"With the fall in inflation we expect the 50bps cut in SBP discount rate in next monetary policy announcement likely in the late month," Azeem said.
"We foresee further reduction in finance cost of highly leveraged firms due to low interest rates expectations," said the analyst.