LAHORE - The benchmark KSE 100-index of Pakistan Stock Exchange witnessed a decline during this week, posting an attrition of 335 points or 0.9 percent WoW.

Volumes remained dull, as average daily traded volumes declined by 13 percent WoW. Lack of clarity on external financing led market participants to remain cautious during the trading week. Average daily value also witnessed a sluggish trend, with 16 percent WoW decline, clocking in at $34m. On sector-wise performance, oil & gas exploration sector remained lackluster, posting a decline of 6 percent WoW primarily due to ~13 percent WoW decline in international oil prices. During the week, net foreign selling accumulated to $12m. This outflow was majorly driven by net selling in the banking sector, which amounted to $4.5m. Moreover, as per the latest data released by the State Bank of Pakistan (SBP), the central bank's foreign reserves increased back to $8b, primarily due to receipt of second tranche of US$1bn from Saudi Arabia in the previous week.

Experts said that it was a dull week for the benchmark index, where negative sentiments persisted as the index lost 335 points (or -0.87 percent), closing at 38,251. Investors preferred to remain on the back foot due to the bleak economic outlook and expected poor corporate earnings for the coming year. Even the announcement by the United Arab Emirates towards end of the week to deposit $3b in the State Bank of Pakistan, was unable to alter dreary outlook.

With international oil prices hitting 17-month low this week, E&Ps were the worst performing sector, chipping away 374 points. They were followed by commercial banks which ate away 177 points.

MFL returned 7 percent this week amidst its announcement that company is in agreement with Barentz International (B.V.) to establish joint venture company in Pakistan, as its stock price gained 7 percent WoW.

Foreigners’ selling for the week was $12.2m vs $12.9m in the previous week. This was there 33rd week of consecutive selling. Among local investors’, mutual funds and individuals were net buyers amounting to $7m, cumulatively.

During the week, United Arab Emirates announced its intention to deposit $3b (equivalent to AED11bn) in the State Bank of Pakistan to support the financial and monetary policy of the country.

In a notice to the exchange, Hub Power Company Ltd (HUBC) announced it has signed financing documents for its 330 MW Thar Energy Limited (The Company) power project during Joint Coordination Committee (JCC) meeting held in Beijing. Thar Energy Ltd has been established by partnering with Fauji Fertilizer Company Ltd and CMEC TEL Power Investments Ltd (CTPIL) for equity investment of 30 percent and 10 percent, respectively.

A bit of a commotion was caused in the corporate sector after the announcement at the Pakistan Stock Exchange (PSX) of withdrawal of public announcement of intention (PoI) to acquire 18,336 mn shares or 66.40 percent stake in K-Electric Ltd by Shanghai Electric Power Company Ltd.

Experts said that contrary to the claims that the PTI government is not in a hurry to join the IMF loan programme, it is much desperate and craving for a package of $8-10b and for this, it is ready to even further devalue Pak rupee up to Rs150 and discount rate at 10.30-11 percent.

During the week, the Federal Board of Revenue (FBR) evolved a comprehensive plan for tax reforms to accelerate revenue collection in the next six months of the current fiscal year.

The government and a consortium of Islamic banks agreed to launch a bond of Rs200b, called the Pakistan Musharqa Sukuk, latest by the middle of January to support the power sector entities facing cash constraints due to chronic circular debt.

Pakistan and China signed an agreement to expand industrial cooperation in diverse fields and attract investment in special economic zones.