KARACHI: The KSE-100 index continued to go north in the outgoing week as bullish sentiments prevailed in the market for the fifth consecutive week. The index gained 847.93 points, or 2.11%, during the week, closing above the 41,000-point mark.
Positive sentiments were witnessed as the State Bank of Pakistan’s (SBP) foreign currency reserves crossed the $8-billion mark after the arrival of $1 billion each from Saudi Arabia and the United Arab Emirates (UAE).
In addition to that, the bourse received major support from a moderate hike of 25 basis points in the key interest rate to 10.25% against the 150bps hike in November 2018. It signals that the monetary tightening may come to an end in coming policy reviews.
The rally was also supported by last week’s economic reform package announced by the government and continued buying by foreigners for the second successive week.
Moreover, the Asian Infrastructure Investment Bank (AIIB) on Thursday said it was considering investing over $1 billion in Pakistan’s critical infrastructure projects in the transport, urban and rural water and energy sectors. This would expand the AIIB’s total portfolio in Pakistan to $1.462 billion including two projects currently under the implementation phase.
On the economic front, total public debt and liabilities crossed the Rs30-trillion mark as the Ministry of Finance submitted the debt compliance report in parliament, agreeing that certain targets envisaged in the Fiscal Responsibility and Debt Limitation (FRDL) Act could not be achieved.
The edotco Group, a unit of Malaysian telecoms firm Axiata Group, planned to invest $250 million over the next five years in Pakistan to expand and upgrade its infrastructure network to help meet the projected fivefold increase in mobile data usage in the country, a company official said.
Meanwhile, trading activity remained high during the week with average daily traded volumes inching up 3.8% to 175 million shares. However, average daily traded value fell 5.8% to $49 million.
Positive contribution to the index was led by commercial banks (up 234 points) amid a hike in the policy rate, oil and gas marketing companies (129 points), automobile assemblers (83 points), oil and gas exploration companies (74 points) and cement manufacturers (72 points).
On the flip side, major sectors that remained under pressure were tobacco (down 41 points) and automobile parts and accessories (five points).
Among individual stocks, top contributors were Pakistan Petroleum Limited (up 79 points), Bank AL Habib (64 points), Pakistan State Oil (50 points), Lucky Cement (43 points) and MCB Bank (39 points).
Foreign investors continued to buy, accumulating $12.3 million worth of stocks during the week compared to net buying of $17 million last week. Major buying was witnessed in commercial banks ($7.7 million), and exploration and production companies ($1.7 million).
On the domestic front, major selling was reported by mutual funds ($5.3 million) and companies ($4 million).
Among major highlights of the week were the government imposing a moratorium on new oil marketing companies, Kia Lucky Motors announcing the start of vehicle production by September, IMF seeking a further taxation measure from Pakistan and the government announcing the provision of health cards to 15 million families.
