Lahore - The bull-run continued for the second consecutive week at the bourse, shrugging off concerns over political landscape and helping KSE-100 index closing the week up 3.6 percent. KSE-100 index edged up to a nine-month high of 36,000pts during the week as rumors surrounding re-entry of Pakistan into MSCI Emerging Market from Frontier Market gathered pace. The market also took cue from international crude oil prices where stability in prices led to aggressive buying in the Oil & Gas sector (+3.9 percent WoW), said Faizan Ahmed from Topline.

He said that strong cement dispatches number and value buying in the banking sector instilled euphoria in the respective sectors. Major outperformers during the week were (1) Pakistan Telecommunications Limited (PTC) with resurfacing rumors of ICH like setup, (2) Oil & Gas Development Company (OGDC) on account of stable oil prices and rumors of the stock becoming Shariah compliant again and (3) Lucky Cement (LUCK) in response to strong provisional offtake numbers. Interest in large cap stocks can also be gauged from increase of 8 percent WoW in average traded value versus a decline of 1 percent in average traded volumes.

FXTM chief market analyst Jameel Ahmad comments that the Dollar has suffered from yet another moment of sharp weakness before recovering its losses following the NFP headline figure being announced at an uninspiring 160,000. The headline job number is not only 40,000 below the median expectations, but it should finally put this ongoing idea around a possible US rate rise in June to bed, and the only reason why it has not completely as of yet is because average earnings were announced at a robust 2.5%.

“Personally I still remain very unconvinced that the Federal Reserve will raise interest rates again in June and I am also suspicious that the two interest rate rises that the markets are currently talking about in 2016 could still be downgraded to just one. I believe that the headline job number at a disappointing 160,000 is very weak and will fail to convince voting members that it is still a wise idea to raise interest rates next month ,” said Jameel Ahmad.

Experts said that the robust activity was seen at the local bourse this week as investors reacted positively to Pakistan’s potential reclassification into MSCI Emerging Market Index. Benchmark KSE-100 index gained 3.6 percent during the week mainly led by index heavy weight Banking and Oil exploration stocks.

On a sector level, Construction & Material, Industrial Metals & Mining and Fixed Line Telecommunication were top performers during the week as they rose by 5.6 percent - 6.4 percent; Life Insurance and Tobacco were major losers as each of them fell by 1.2 percent. Foreign investors were net buyers of US$21.2mn this week with major buying in Cement sector of US$8.2mn and Banks of US$5.3mn.

During the week, Sui Northern Gas Pipelines (SNGP) has entered into a govt. backed syndicated loan agreement amounting to Rs54.6bn for a period of 10 years, company informed through a PSX notice. The loan is being arranged for financing of pipeline infrastructure development project phase – II for transmission of Re-gasified Liquefied Natural Gas (RLNG) and indigenous gas to intended customers. Project is expected to be completed by the end of this year. Post-completion, SNGP will be able to transfer additional 1,200mmcfd through its network.

According to news reports, Pak Suzuki Motor Company (PSMC) is ready to invest US$460mn in Pakistan if the govt. provides the right incentives to existing auto companies under the new auto policy. Investment in state-of-the art new plant on an urgent basis and introduction of four new models by 2018 is on the cards if required incentives are offered. To point out, PSMC will likely be introducing two new models by 2017-18.

Pakistan Telecommunication Authority (PTA) has targeted to hold auction for Next Generation Mobile Spectrum (850MHz 3G band) on June 11, 2016. In the information memorandum, PTA has set the base price for the spectrum at US$395mn. Central bank plans to raise Rs900bn by selling T-bills and Rs200bn through Pakistan Investment Bonds (PIB) during May-Jul 2016, according to the auction calendar released by State Bank of Pakistan (SBP).

In a meeting of Private Power & Infrastructure Board (PPIB) held earlier this week, Letters of Interest (LoI) were issued to Hub Power Company (HUBC) and Thal Power Company to develop 330MW coal based power projects in Thar.