Positive trend witnessed

Pakistan Stock Exchange witnessed positive trend during the outgoing week ended on November 1, 2019 on the back of healthy buying in various sectors.

BRIndex100 gained 83.18 points on week-on-week basis to close at 3,606.11 points. Average daily volumes stood at 153.436 million shares.

BRIndex30 increased by 404.42 points to close at 18923.69 points with average daily turnover of 102.025 million shares.

KSE-100 index surged by 720.15 points on week-on-week basis and closed at 34,377.61 points. Trading activities also improved as average daily volumes on ready counter increased by 33.5 percent to 166.36 million shares as compared to previous week's average of 124.61 million shares. Average daily trading value increased by 41.2 percent to Rs 5.57 billion.

Total market capitalization increased by Rs 59 billion to Rs 6.698 trillion.

An analyst at AKD Securities said that the KSE-100 index retained momentum this week, gaining 2.14 percent on week-on-week basis after remaining under pressure in the backdrop of FATF developments (where deadline to meet compliance was extended till February 2020) and application of 'minimum brokerage commission'.

The market cheered resolution of issues between the government and traders, declining PIB bond yields (3y/5y/10y bond yields down 115/90/90bps) that provided juice to market expectation of an early rate cut, deferral by a year of axle load policy (Cements up 7.8 percent/ Engineering up 7.4 percent) and possible revision in OMC margins (MS/HSD by Rs 0.25/ltr each / OMCs performance: up 5.6 percent).

Surprises in the result with PSO (due to higher inventory gains), HUBC (higher capacity payments and share of profit from 47.5 percent owned CPHGC), and PAEL (due to low inventory costs and manageable debt levels) posting higher than expected results, also reinvigorated sentiment. So much so, the market did not give consideration to the on-going 'Azadi March' which has reached to the capital.

Participation wise, Companies and Mutual Funds (Net Buy of $4.9 million and $2.8 million respectively) during the week absorbed selling of foreigners ($3.1 million), Banks ($2.2 million) and Insurance ($2.2 million).

Apart from OMCs and Cements, major performances were witnessed in Power (up 2.1 percent on possible issuance of Power Sukuk by year-end or early part of next year), and Commercial Banks (up 1.4 percent). On the flipside, Textiles lost 2.3 percent on weak earnings announcements.

Top performers in AKD universe were, CHCC (up 23.99 per cent), PIOC (up 22.2 per cent), DGKC (up 20.3 per cent), ASTL (up 18.66 per cent) and PSO (up 16.31 per cent) while laggards were HASCOL (down 6.01 per cent), NCL (down 3.73 per cent), FFC (down 2.79 per cent), MEBL (down 1.37 per cent) and OGDC (down 1.07 per cent).

An analyst at JS Global Capital said that the KSE-100 index closed a rather volatile week at 34,377 levels having gained 2.1 percent over the previous week. Foreign investors again turned net sellers in the week with significant selling seen in the E&P sector. Mercury levels continue to rise in the political arena as the JUI-F's Azadi March reaches the Federal Capital, demanding for the Prime Minister's resignation. Meanwhile, the IMF team is in Islamabad reviewing the country's quarterly performance. In this regard, the government has requested the team to relax the annual Rs 5.5 billion tax target by Rs 300 billion on the basis of a stronger-than-expected economic slowdown.