Lahore - The local bourse started off on a positive note, as the KSE-100 index closed at 37,547 levels, up 1 percent WoW. Market participation also improved as average daily traded volumes clocked in at 118mn shares, up +7 percent WoW, while traded value also increased by 14 percent WoW. Key net sellers were Insurance Companies with US$15mn, while this was broadly absorbed by the Mutual Funds with US$13mn of net buying. During the week, declining international oil prices finally benefitted Pakistan where in spite of announcing a cut in POL prices for the month, the government managed to increase taxes and levy on the same to increase overall revenue collection. Sector-wise performance displayed Exploration & Production sector (+2.3 percent WoW) and Banking sector (+1.8 percent WoW) among the outperformers during the week, while Refineries (-2.2 percent WoW) remained among the laggards. On the other hand, fresh drug price notification released by Drug Regulatory Authority of Pakistan (DRAP) during the end of the week failed to excite investors as the Pharmaceuticals sector closed down 0.1 percent WoW. During the week, two leading automobile companies, Indus Motors (INDU, +0.03 percent WoW) and Pak Suzuki (PSMC, +3.6 percent WoW), announced vehicle price increases. Other key news during the week were (1) Pakistan sent the Terror Financing Risk Assessment Report to FATF, (2) State Bank of Pakistan's (SBP) reserves further declined by US$170mn during the last week, declining to US$7.29bn, (3) offshore gas exploration by Exxon Mobil and ENI is likely to start from next week, (4) profit margins on National Savings Schemes were increased by 1.5 percent-2.7 percent, reaching a six-year high, (5) US Senator has proposed free trade pact for Pakistan and (6) Unit 1 of Hub Power's (HUBC) subsidiary supplied 660MW to grid on trial basis.

Experts said that the KSE-100 index started the first week of the new year off on a positive note as it gained 481 points (or +1.3 percent), snapping its 2 consecutive-week close in the red, closing at 37,548 level. Positive sentiments this week were driven by reports that China has pledged to lend US$2bn to Pakistan to shore up its foreign exchange reserves. Furthermore, Finance Minister Asad Umar’s recent statements that the biggest investment in Pakistan’s history from Saudi Arabia will be announced soon, also uplifted investors’ sentiments. 

Sector-wise Commercial Banks, Oil & Gas Exploration Companies and Fertilizer were the best performing sectors as they added 471 points, cumulatively.

Foreigners selling for the week was US$0.51mn vs. US$1.1mn in the previous week. This was their 35th week of consecutive selling. Among local investors’, Individuals and Insurance were also net sellers of US$17.7mn, cumulatively, while Mutual Funds were net buyers of US$13.4mn, cumulatively.  

During the week, reserves held by the State Bank of Pakistan decreased by US$170mn to US$7.29bn on account of external debt servicing and other official payments during the week ended on Dec 28.

The government has jacked up the price of indigenous liquefied petroleum gas (LPG) by Rs2/kg or Rs22.92/11.8kg for the month of January 2019, which translates into an increase of 1.71 percent over the previous month.

Pakistan LNG is seeking five liquefied natural gas (LNG) cargoes for delivery over March to April, a tender document showed. A consistent fall in cotton cultivation area for the last seven years has eventually reduced crop production to little over 10 million bales this year from the bumper crop of 15m bales in 2011-12.

Opec oil supply fell in December by the largest amount in almost two years, as top exporter Saudi Arabia made an early start to a supply-limiting accord while Iran and Libya posted involuntary declines.

Foreign exchange firms provided US$13bn to the government through commercial banks over the last nine years to stabilize the currency market, an official said.

Pakistan has dropped its initial idea to amend the Anti-Terrorism Act (ATA) 1997 after the lapse of presidential ordinance arguing that the Ministry of Foreign Affairs could freeze assets of prescribed organizations/ individuals through a notification of SRO for complying with the UN

Gold prices scaled a more than six-month peak as fears of a global economic slowdown embellished safe-haven demand for bullion, with a weaker dollar adding further support.