LAHORE - Index started the New Year on a positive note, galloping from 47,800 levels to close at 49,038, adding 1,231points or 2.6 percent during the week.

The mid-week, however, witnessed some profit taking and cautious buying while investors keenly tracked the developments on Panama case hearings. Steady flows from both local and foreign investors were witnessed during the week, particularly in blue chips. Both average traded volumes and value surged by massive 43 percent and 44 percent WoW, respectively, reflecting investors’ interest.

Steel sector remained in the limelight, gaining 7 percent during the week, following announcement by Dost Steel notifying commencement date of its operations as of May 2017 while Amreli Steel gained on the back of rumors of significant discounts driving healthy volumes for the company.

Cement sector surged 2 percent in anticipation of increase in prices in North region by Rs15-20/bag while expectation of healthy off take numbers for December 2016 attracted investors’ interest in fertiliser sector (up 7 percent). National Refinery (NRL) gained traction, during the week, post announcement of 50 percent reduction in financing requirements for its Isomerisation and Desulphurisation project owing to better cash flow position of the company.

Experts said that the local bourse started off the New Year on an exciting note where lower than expected CPI for the month of December 2016 and slowdown in foreign selling boosted investor’s confidence in the local market. The KSE-100 index concluded the first week of 2017, breaching the 49,000 mark to reach at the highest ever level in today’s trading session. The local index registered a gain of 1,231 points or 2.5 percent over the outgoing week to close at 49,036 index levels.

Average daily volumes for the outgoing week posted a decline of 43 percent WoW to 408 million shares while average daily value decreased 44 percent WoW to Rs21 billion/$203 million over the week. Sector wise top three gainers over the outgoing week remained Fertiliser, Oil and Gas Exploration and Commercial Banks which were up 6.9 percent, 2.3 percent and 1.7 percent, respectively. While Tobacco, Auto Parts & Accessories and Sugar & Allied Industries remained top losers posting a decline of 7 percent, 3 percent and 1 percent, respectively.

Foreigners remained net sellers of $2.0 million during the week. Oil & Gas Exploration, Chemicals and Banking sectors saw major net buying of $5.1 million, $3.3 million and $2.4 million, respectively while selling was seen in Oil & Gas Exploration and Cement sector of $6.9 million and $2.9 million respectively.

As per the State Bank of Pakistan (SBP), the country’s foreign exchange reserves declined to $23.16 billion as of December 30, 2016 from $23.29 billion a week ago. The foreign exchange reserves held by the central bank fell by $30 million to $18.269 billion. The decrease in the forex reserves was attributed to external debt servicing. The foreign exchange reserves of commercial banks reduced to $4.89 billion as compared to $4.99 billion a week ago.

K-Electric (KEL) shelved a mega project of converting its furnace-based plants with a gross 420 mega watt capacity to low-priced coal after the utility failed to secure cost-effective tariffs from the regulator, as per media sources. The National Electric Power Regulatory Authority (Nepra) awarded the tariff for coal converted plants in 2015 while KEL submitted a review petition with the regulator to revise up the tariff. However, NEPRA rejected the company’s application leading to shelving down of the whole project. This development is neutral to negative for the company.

As per news reports, the draft of general tax amnesty scheme has been finalised by the federal government. Under this proposed scheme, those who even once got issued a CNIC or Pakistani passport will be named as Pakistani. All Pakistanis may benefit from this scheme within six months of its announcement. This may be along the same lines as that implemented by Indonesia recently and may result in both forex inflow and tax revenues for the government.