LAHORE - Pakistan Stock Exchange remained in shambles for the third consecutive week in a row with the benchmark KSE 100-index splashing red on the screen in all trading sessions.

Controversial comments by ex-PM Nawaz Sharif made over the weekend on Mumbai terror attack added towards overall uncertainty and selling pressure. Meanwhile, the National Assembly has passed the Finance bill 2018-19. On the macroeconomic front as well, cracks appeared to widen further with recent numbers showing continued downward spiral in FX reserves, international oil prices hitting $80/bbl mark, and release of external debt statistics showing an alarmingly high debt to GDP ratio of 64.1 percent by end Mar-2018. Rebalancing of MSCI EM index during the week also contributed towards pressure as the index provider excluded three companies namely; 1) IGI Holdings Limited (IGIHL); 2) National Refinery Limited (NRL); and 3) Pak Electron Limited (PAEL) from the MSCI Small Cap index. In general, major investor groups such as foreigners and local mutual funds sold equities during the week, recording net selling of $20m and $17m respectively. Market activity also suffered with average traded volumes (115m), declining by 31 percent and 22 percent respectively.

Experts said that Pakistan equities lost 4.5 percent in a single week and closed at 41,624 points level, which is highest weekly loss of 2018 amidst depleting foreign reserves and rising political noise ahead of general elections 2018. Investors’ remained sidelined during the week where market participation in terms of value on Thursday touched 46-month low. Traded value during the week went down by 22 percent, while trading volume showed decline of 31 percent.

Lower investors’ participation is due to absence of any positive trigger. Key events to track going forward will be 1) official announcement of general election date, 2) inflows of foreign currency in Pakistan, and 3) announcement of interim Prime Minister by leader of opposition and prime minister. Foreign selling in commercial banks kept whole sector under pressure during the week and eroded 346 points from the index. Among scrips, HBL lost 4.5 percent, UBL (-5 percent) and MCB (-1 percent) during the week.

Foreigners were net sellers during the week amounting to $20m vs net selling of $4.1m last week. On the other hand, amongst local investors mutual funds were net sellers of $16.8m whereas banks were net buyers of $20.2m.

Current account numbers for the month of April were also announced by State Bank of Pakistan (SBP). The current account deficit (CAD) for Apr’18 was reported at $1.96b, which was much higher than expectations and was up 61 percent over Mar’18 CAD of $1.2b. For the Jul-Apr’18 period, CAD has been reported at $14.0b, up 50 percent over last year.

Engro Polymers (EPCL) has announced right shares of 37 percent at price of Rs22 per share (inclusive of premium of PKR 12/share) for expansion of its PVC capacity by 100k tons to 295k tons and debottlenecking of 50k tons of VCM. MARI Petroleum (MARI) notified exchange regarding allocation of 75 mmcfd gas from Mari gas field to Pak Arab Fertilizer Limited (PFL) from its new discoveries and appraisal/development wells.

Total liquid foreign reserves of the country stand at 17.067 billion dollars, said the State Bank of Pakistan. According to SBP's weekly statement, the foreign reserves, held by the State Bank on May 11, were $10,798.9 million and the net foreign reserves with commercial banks were $6,268.1 million