LAHORE -  The local bourse largely remained range-bound on selling pressure from both local and foreign investors, with the benchmark KSE-100 index closing at 49,210 points (up 0.35 percent or 172 points).

Two major developments during the week included, cessation of subsidy on fertilisers (barring imported urea) followed by increase in prices by local manufacturers and announcement of much awaited Rs180 billion exports package by the government. In terms of activity, average traded volumes jumped by 20 percent WoW while value increased by 7 percent WoW. Moreover, total net outflows from foreign investors clocked-in at $47 million. Hub Power Company (HUBC) attracted investors' interest (up 5.3 percent WoW) post announcement of increase in its stake in 2x660MW coal-fired project to 47.5 percent from 26 percent previously.

Release of official auto numbers by PAMA for December 2016 attracted some activity in select stocks among automobile sector. Announcement of additional gas supply to Engro Fertiliser (EFERT) from Mari Field also garnered investors' interest in EFERT and its parent company ENGRO. Experts said that market had a rollercoaster ride during the week on the back of; fertilizer sector subsidy reversal notification, much anticipated Textile package, and investors’ positive sentiment towards Engineering sector due to steel. The bourse reached all time high of 49,517 index level during the week. However, profit taking led the index to lose 306 points on week’s last trading session.

Average daily volumes for the outgoing week posted an increase of 20 percent WoW to 489 million shares while average daily value increased 7 percent WoW to Rs23 billion/$216 million over the week. Sector wise top three gainers over the outgoing week remained Engineering, Refinery and Pharmaceuticals which were up 8.3 percent, 3.9 percent and 3.8 percent, respectively. While Textile, Oil & Gas Exploration and Fertiliser sectors remained top losers posting a decline of 2.7 percent, 2.1 percent and 1.2 percent, respectively.

Foreigners were net sellers of $46.5 million during the outgoing week. Chemicals, Cement and Electricity sectors saw major net selling of $14.2 million, $13.1 million and $5.8 million, respectively. As per the news, high level delegation of Turkey and Thailand are due to visit Pakistan on January 17, 2017 to negotiate the terms of free trade agreements including commodity lists and tariff rates. The agreements are likely to be signed in the next three months. In the recent data released by the State Bank of Pakistan (SBP), the country’s foreign exchange reserves rose to $23.2 billion as of 6th January, 2016, from $23.2 billion a week ago. The reserves held by the SBP increased by $41 million to $18.3 billion against $18.3 billion in previous week. However, the foreign exchange reserves of commercial banks inched down to $4.9 billion as compared to $4.9 billion in the preceding week.

Market’s upward momentum is expected to remain contained in the upcoming week as the index nears the psychological resistance level of 50,000 points. However, a reversal in foreign selling would likely assist the market to bypass the aforementioned resistance. It is believed that banking sector will be in limelight in anticipation of Monetary Policy announcement by the last week of the month.