LAHORE - Developments on political scenario continued to haunt investors during the initial part of the week; however, recovery witnessed later helped the index to close only 0.1 percent WoW lower to previous week at 41,064. However, overall trading volumes continued to remain thin where average traded volumes (117m) declined by 13 percent WoW, while on the other hand traded value ($68m) improved by 3 percent WoW. Most of the value buying was done by institutional investors where insurance companies stood out as the net major buyers of $11 million worth of equities followed by mutual funds with net buying of $10 million.

Heavyweight oil & gas exploration companies (+8 percent WoW on recovering international crude oil prices) remained the major contributors in keeping index points drop in-check. Apart from E&Ps, almost all heavyweights such as cements (down 4 percent WoW on unclear future of prices), OMCs (down 1 percent WoW) and banks (down 1 percent WoW) continued to put pressure on the index. On the macroeconomic front, CPI inflation numbers for the month of October 2017 were also announced that clocked-in at 3.8 percent/0.7 percent YoY/MoM. Furthermore, S&P kept its ratings for Pakistan at 'B' in its recent credit report on Pakistan.

Experts said that index witnessed volatility throughout the outgoing week. Overall positive S&P review and decent earnings season were overshadowed by incessant foreign selling in first 2 days of the week (attributed to month end rebalancing) and political noise. Thereafter, consistent buying by value buyers sensing that the market has been pulled down to bargain levels supported by oil sustaining near $55/bbl (near 2-Year high) led to a strong rally which resultantly led the market to close flat at 41,064 points level WoW.

Stocks including OGDC (7 percent WoW), PPL (8 percent WoW), POL (6 percent WoW), MARI (9 percent WoW) and MCB (2 percent WoW), added 450 points to the index. On the other hand, UBL (-4 percent WoW), LUCK (-5 percent WoW), DAWH (-4 percent WoW), BAHL (-3 percent WoW) and SNGP (-4 percent WoW) detracted 231points from the index.

E&Ps sector was the top gainer over the week, up 8 percent; tobacco and cement sectors were down 4 percent each over the outgoing week. Insurance and Mutual Funds were the largest domestic buyers at $10.6 million and $10 million, respectively, while foreigners sold $30.7 million worth of shares during the week vs selling of $5.3 million last week. Selling was concentrated in banks ($6m), E&Ps ($4.7m), fertiliser ($4.4m), Power ($2.1m) and cement ($2m).

During the week, the government announced to considering sell Rs4.3 trillion of T-Bills & PIBs by January 2018. Out of the total, PIBs worth of Rs150 billion will be sold till January 2018 as per State Bank of Pakistan (SBP). Azgard Nine (ANL) reported its FY17 results with Loss of Rs0.29 per share vs LPS Rs1.79 last year. Revenues declined by 3 percent YoY. While gross margins have improved from 11 percent to 15 percent. According to SBP, the total liquid foreign reserves of the country stood at $19.8 billion ($19.9b last week) as of October 27, 2017. SBP’s reserves decreased by $95 million to $13.8 billion due to external debt servicing and other official payments.

The Oil and Gas Regulatory Authority (Ogra) said that it would investigate a complaint that fuel suppliers including local units of Shell and Total as well as Pakistan State Oil (PSO) had added manganese to their gasoline. Honda Motor Co’s Pakistan subsidiary, Honda Atlas Cars (Pakistan) Ltd, filed the complaint, saying the additive appeared to be damaging engines in its vehicles.