Lahore -  The positivity prevailed in the week’s trading session as KSE-100 index rebounded by 1.1 percent, recovering from last week’s losses.

Bulls made their way back into the local bourse as regional markets bounced back after investors disregarded negative economic repercussions of the Brexit.

Global crude oil also staged a comeback, touching $50/b (Brent), stimulating the Oil and Gas sector to outperform the benchmark index by 0.2%. In specific scrips, K-Electric (KEL) remained in the limelight during the week on rumors of its potential acquisition surfacing in local newspapers. The company however, cleared the air through a notice to the PSX declaring the news incorrect. Of the key sectors, cements remained in the limelight as manufacturers increased cement prices by Rs35/bag to pass on the impact of budgetary measures and overall strong outlook. During the week, foreigners continued to liquidate assets with cumulative net selling of US$3.6mn (net). Other important highlights of the week were (1) China backed AIIB approving first loans for Pakistan, (2) KAPCO seeking proposals for services of international consultants for coal power project, (3) FBR increasing PTA and PSF duty by 1%, (4) OGDC discovering gas reserves at Thal-West and Bitrism-West, (5) Omantel receiving offer for its stake in WorldCall, (6) Baluchistan getting US$256mn for development projects from World Bank and (7) OGRA recommending increase in domestic petroleum product prices.

FXTM research analyst Lukman Otunuga commented that WTI Oil cut below $48 during trading on Friday amid the continued uncertainty over the impacts a Brexit would have on the global economy. Concerns remain elevated of a potential Brexit fueled recession which could have a negative impact on global demand while the oversupply woes have returned following the slow stabilization in global production. He said that the over-extended correction may be running out of steam with prices set to decline lower when the lingering supply fears haunt investor attraction. From a technical standpoint, a solid weekly close below $48 could open a clean path back below $46.

Regarding dollar Lukman Otunuga stated that dollar bears were on the offensive during trading on Friday as the lingering Brexit anxieties heightened concerns over the Federal Reserve failing to raise US rates in 2016. US rate hike expectations have periodically declined, with the unexpected Brexit victory making it increasingly difficult for the central bank to take action. Although US data has displayed signs of improvement in the coming months, the persistent post Brexit uncertainty and ongoing concerns over the global economy could keep the Fed on standby.

Experts said that global markets crashed on Friday as Britain’s unprecedented vote to leave the European Union rocked world financial markets. As a result Pakistan market also fell 848 points (2.2%). Benchmark KSE 100 Index closed at 37,389 level which recovered partially after falling to an intra-day low of 36,825 level.

Besides one third foreign holding in free float, investors were concerned that Pakistan exports to UK will be affected after Brexit.

Local bourse was dull throughout the week and after Friday collapse, KSE-100 index fell 3.6% over the week.

Tobacco and Refinery sector were among the gainers this week as they rose 8.1% and 2.2%, respectively. Automobile Assemblers, Oil & Gas Exploration Companies and Textile Composite were the losers this week, mainly on due to Brexit’s impact. The sectors fell in the range of 2.2% - 4.4% this week.

Over the week, foreigners were net sellers of US$20.5mn worth of shares. Selling was seen in Chemicals and Cement sector of US$6.8mn and US$5.5mn, respectively, whereas net buying of US$1.3mn witnessed in Banking sector.

Experts said that Pakistan has outperformed its Asian peers in terms of market performance. It outperformed Sri Lanka, which fell by 10% (in US$ terms) and also Bangladesh, which fell3% (in US$ terms). Pakistan also outperformed Vietnam, which was up 10%(in US$ terms). Further, MSCI Pakistan Index was up 10% while MSCI Frontier Market (FM) Index was down 3%.

They said that Pakistan’s benchmark total return KSE-100 index was up 15% (15% in US$) in 1H2016 to 37,784. Bulk of this gain of 14% (14% in US$) was seen in 2Q2016 due to expectations of Pakistan Market upgrade from Frontier Markets (FM) to Emerging Markets (EM) by MSCI, which was announced on Jun 15 and will be effective from May 2017.

The upgrade news met with exhilarating response from investors as benchmark KSE-100 index gained 1,042 points (up 2.7%) on Jun 15 and subsequently closed at an all-time high of 38,776 on Jun 17.

The market has come off since then because of both profit taking and also concerns of investors over Brexit and its possible implications for Pakistan economy.