Lahore - The KSE-100 index continued bearish momentum, however hitting with a heavier hammer this week with 4.8 percent WoW decline, closing at 38,562. Experts believe negative sentiments were broadly driven by concerns over lack of clarity on financial support from China and UAE. It is now expected that China may offer a US$2bn loan. Also, increase in interest rates and devaluation of the rupee against the greenback during the last trading session of the previous week (SBP foreign exchange reserves down by US$560m) also added to investor concerns over future profitability of the corporate sector. In addition, US$29mn selling from Mutual Funds also added to the ongoing pressure, where selling was mainly witnessed in the Cement (US$1.8mn), E&P (US$1.7mn) and Fertilizer (US$1.2mn) sectors. Selling from Mutual Funds was mostly absorbed by the Insurance companies with net buying accumulating to US$18mn this week. Volumes improved to 163mn shares on an average daily basis, while daily traded value declined to US$58mn. Sectors that led the index decline were OMCs (-10 percent WoW), Engineering (-8 percent WoW), Autos (-7 percent WoW) and Cements (-5 percent WoW). On sector-wise development, the government has allowed the Refinery sector to clear up their piling furnace oil inventory by means of exports; nonetheless the sector closed down 5 percent WoW. Moreover, the government has also decided to impose ban on furnace oil imports.

Experts said that it was an unsatisfactory week for the benchmark index as last week’s developments, along with a lack of any triggers during the outgoing week kept the benchmark index under selling pressure. The index declined by 4.8 percent (or -1934 pts) closing at 38,562 level. This was the largest weekly decline in 67 weeks (since Aug 18, 2017).

International oil prices remained volatile as OPEC and Non-OPEC countries are meeting in Vienna, Austria, between the 6th and 7th of December, 2018 this week. Resultantly E&P’s remained under pressure during the week, chipping away 279pts from the index. The sector was only second to Commercial Banks, who despite the 150bps interest rate hike, fell victim to the negative sentiments of the market as the sector ate away 343pts.

Foreigners selling for the week were $2.54m versus $51m in the previous week. This was there 31st week of consecutive selling. Among local investors’, Mutual Funds were net sellers of US$31mn while, Insurance were net buyers amounting to US$18.9mn.  

During the week, reserves held by the State Bank of Pakistan plunged by US$560mn (or 6.95 percent) to US$7.5bn during the week ended on Nov 30.

Two months after the supplementary budget 2018-19, the federal cabinet on Thursday approved another Rs25.75bn ‘supplementary grant’ to provide subsidised gas to five zero-rated export sectors in Punjab.

Experts said that Sindh has to focus on developing industrial estates with necessary infrastructure to provide an enabling environment for investment, a delegation of the World Bank suggested during a meeting with Chairman Planning and Development (P&D) Board Sindh, Muhammad Waseem.

They said that government is mulling to mix regasified liquefied natural gas (RLNG) with system gas to meet growing demand of domestic consumers, well-placed sources said, suggesting a rise in tariffs as imported fuel is relatively costly.

According to experts, gold rebounded to a near 5-month peak as the dollar declined amid expectations of a slowdown in the pace of US rate hikes, with investors seeking refuge from a sell-off in global stocks.