LAHORE - Political uncertainty in the country kept the investors sentiments weak, as they took a cautious stance throughout the outgoing week, however, foreign buying gained momentum as foreigners stood as the net buyers of shares worth $9.6 million. The KSE 100 Index was up by 1.7 per cent on weekly basis and closed at at 10,432 level while turnover stood at 90 million shares, down by 2 per cent. Cement sector remained in the limelight as UN approved $1.88 billion rehabilitation and reconstruction for Pakistan. Experts said that weak economic data such as higher than consensus inflation of 15.7% and 28.5% plunge in net foreign investment inflow in 1QFY11 too kept investors sidelined. Even positives such as upward revision in gas wellhead prices and robust remittances data for July-Sept failed to trigger investor interest. Sana Hanif, a stock market expert, said foreigners stood as net buyers of shares worth US$9.6mn, where as banks were the net sellers of US$6.9mn. Ahsan Mehanti, Director, Arif Habib Investments Limited observed that positive activity witnessed on institutional and foreign interest in Pakistan banks, fertilizer and banking scrips ahead of major earning announcements next week. Expectation rise over pledges in international donors meeting in Brussels for fighting terrorism and rebuilding after Pakistan floods and higher international oil prices near to $83 played a catalyst role in positive activity at KSE despite concerns for rising political-judiciary conflict in NRO case hearings and rising circular debt in Pakistan energy sector. The finance minister, Hafeez Sheikh met with the IMF and WB officials and although no major development came to the forefront, the IMF has hinted that it may relax the fiscal deficit target by 0.7% and may disburse US$1.8bn by Dec upon successful completion of the reforms. In the outgoing week, the economic data released was a mixed bag: CPI for Sep2010 was higher than industry consensus at 15.7%, foreign exchange reserves were flat at US$16.97bn, whereas remittances were up 13.5% at US$2.65bn. During the week, OGRA raised the wellhead gas prices for 21 fields. The revision was broadly in line with expectations and the E&P stocks witnessed a rally throughout the week. Additionally, the textile ministry requested the EU to include additional 15 home textiles and garment items to its tariff waiver list for exports. However, this too failed to generate activity in NML, though NCL gained 3.7%.Lastly, a 30% cut in PSDP proved to be a sentiment dampener for the cement sector. With the onset of the result season, the market could witness some pre-result rally, going forward. Hasnain Asghar Ali from Aziz Fidahusein & Co said that increasing debt burden should be avoided, however efficient debt management may prove profitable. Presence of financial groups from the local as well as through offshore accounts along with activity by foreign fund managers will ensure availability of trading opportunities. While official statement carrying the timeline for introduction of MTS along with salient features may allow concrete stance. Experts said that US dollar is witnessing a broad based decline against the international currencies these days, as it is currently trading at 1.4 US$/Euros, 81.10 JPY/US$ and 1.6 US$/GBP compared to Thursdays closing of 1.4 US$/Euros, 81.77 JPY/US$ and 1.58 US$/GBP, respectively. The decline in value of the US dollar has a significant impact on the corporate sector of Pakistan. The textile sector stands to gain foremost as 27 per cent of their exports is directed towards the European markets. However, on the flip side local auto assemblers stand to lose as 50-60 per cent of the sectors parts are imported from Japan. Experts currently have a 'Market-Weight outlook on both the textile and the auto sector. Amongst them, NML remain top pick with a target price of Rs63, followed by an accumulate stance on INDU and 'Hold on NCL and PSMC. They said that both PTA and PX prices are currently trading at 2 year high levels. The later is due to surging oil prices standing at $1265-1275 per ton and on the other hand PTA is currently hovering at $1045 per ton. While increase in PTA prices is due to higher cotton prices which prompted consumers to buy more PSF (Polyester Staple Fiber) which is manufactured from PTA. Thus, with higher demand, PTA prices are expected to remain on higher side which bodes well for international and local PTA manufacturers. Salman Abduhoo