Panic selling witnessed

Pakistan Stock Exchange witnessed panic selling during the outgoing week ended on May 17, 2019 on investors concerns over depreciating local currency and other issues. BRIndex100 lost 184.57 points on week-on-week basis to close at 3,442.60 points. Average trading volumes stood at 97.884 million shares. BRIndex30 declined by 1496.89 points to close at 17,124.42 points with average daily turnover of 71.103 million shares.
KSE-100 index plunged by 1549.91 points or 4.5 percent on week-on-week basis and closed at 33,166.62 points. Trading activities however improved as average daily volumes on ready counter increased by 46.1 percent to 107.35 million shares as compared to previous week's average of 73.48 million shares. Average daily trading value increased by 30.7 percent to Rs 4.17 billion.
The foreign investors, however, remained net buyers of shares worth $7.9 million. Total market capitalization declined by Rs 315 billion to Rs 6.811 trillion.
An analyst at AKD Securities said that the market started the week on a negative note, losing 831 points (down 2.4 percent) in the first two trading sessions, as investor's focus shifted towards potentially strict conditions that will unfold post IMF's staff level agreement for a $6 billion Extended Fund Facility to Pakistan.
The market briefly rallied 1.2 percent in the third trading session, as news regarding Kekra-1 well nearing its conclusion surfaced as a glimmer of hope in an otherwise dull market, recouping some of earlier losses. However, the excitement quickly died down on upcoming Monetary Policy announcement scheduled for 20th May'19, where rumors of pre-emptive 100-200 bps interest rate hike started doing rounds. Meanwhile, 3.6 percent PKR devaluation during the latter part of the week further aggravated the overall bearish sentiment.
Performance wise, energy sector remained in the limelight with HUBC (up 6.08 percent), PPL (up 5.93 percent) and POL (up 4.64 percent) were the major gainers in AKD Universe, while laggards included cyclical names DGKC (down 21.44 percent), MLCF (down 20.71 percent), PIOC (down 19.86 percent) and ASTL (down 19.00 percent).
An analyst at JS Global Capital said that the outgoing week witnessed its own share of turbulence at the local bourse as the KSE-100 index once again closed in red with a loss of 4.5 percent. This makes it a seven-week streak, and a cumulative loss of 14 percent.
Unrest at the equity market was a result of anticipation of further interest rate increases and rupee devaluation, in addition to energy price hikes and removal of concessions after the IMF press release during the last weekend.
Concerns were reinforced as the rupee devalued by 5.0 percent at the inter-bank market during the week. Consequently, market participants are now expecting at least a 100bps hike to be announced in the Policy Rate scheduled for next Monday (20th May).
On a sector-wise front, almost all sectors across the board lost market cap this week where Steel (down 16 percent), Oil & Gas Marketing Companies (down 16 percent) and Cements (down 11 percent) were among the worst performers. The Automobile Assembler sector declined by 6 percent as car sales data for April-2019 was published, reporting a decline of 24 percent. However, Oil & Gas Exploration sector was among the few sectors that closed in green, on the back of optimism regarding Kekra-I well development resuming once again.
During the week, Fauji Foods, (down 25 percent), Kohat Cement (KOHC, down 22 percent) and International Industries (INIL, down 23 percent) were among the worst performers; while Pakistan Petroleum (PPL, up 6 percent) witnessed highest returns this week.