Lahore - The PSX-100 index continued an upwards path for the fourth consecutive week. After touching an all-time high during the week, the KSE-100 closed 1.6 percent WoW higher on account of review of Pakistan re-entering the MSCI EM index after eight years and uptick in crude oil prices. Activity during the week improved as average daily volumes improved to 325mn shares (+10.5 percent WoW), while average daily value traded witnessed an increase of 1.4 percent to Rs11.4m. Foreigners though remained net sellers of $7m during the week.

Amreen Soorani of the Topline stated that other major news highlights of the week included: (1) MPS announcement scheduled tomorrow, (2) approval by Baluchistan cabinet to lease Sui Gas Field to PPL for next 10 years, (3) 4.7 percent YoY growth in Large Scale Manufacturing during 9MFY16, (4) FY17 revenue target set Rs3.6trn for FBR, compared to a target of Rs3.1trn in FY16, 17 percent YoY higher, (5) government to consider a massive increase in fixed duties for imported cars and (6) FX reserves reach to a record high of US$21.3bn.

FXTM research analyst Lukman Otunuga commented that global stocks overlooked the resurgence in oil prices with most major stocks tumbling to fresh six week lows during trading as market participants braced over the possibility that the Federal Reserve could raise rates in Q2. This anxiety rippled into the Asian markets that were heavily exhausted following a losing battle against risk aversion, while Yen appreciation pressured Japanese stocks. In Europe, concerns over tepid economic growth in the Eurozone and elevated fears over the state of the global economy have ensured most European equities follow a negative path. With expectations mounting that the Fed could take action despite the unsavory global economic landscape, Wall Street descended deeper into the abyss and this can be view in the S&P 500 that closed -0.4 percent lower. Lukman Otunuga observed that with oil prices rallies losing their grip on global stocks, this combination of heightened US rate rise expectations and overall uncertainty could encourage investors to scatter away from stocks to safe-havens.

According to experts, the outgoing week marked another historic moment for Pakistan stock market as the benchmark KSE-100 index rose to its all-time high of 36,685. The 1.6 percent rally over the week was led by aggressive activity of foreign investors as political tensions between govt. and opposition eased ahead of Pakistan’s potential reclassification into MSCI Emerging Market.

Led by rising foreign flows average daily volume rose 11 percent to 325.4mn shares whereas average daily value increased 1 percent to Rs11.3bn/US$108.3mn.

Refinery sector gained 4.9 percent last week triggered by 12 percent rise in share price of Byco Petroleum (BYCO) due to rising crude oil prices. Rise in international oil price to its 6-month high level helped Oil & Gas Exploration sector rallying 3.2 percent led by Pakistan Petroleum (PPL) which was up 7 percent after it announced discovery at one of its fields.

Foreigner’s activity was abnormal as they bought shares worth US$62.8mn and sold US$69.8mn in the outgoing week. Major activity was seen in Chemical sector with net buying US$2.1mn and Banks with net selling of US$3.6mn.

According to a notice on PSX, Pakistan Petroleum (PPL) has discovered 3.4mmcfd gas from its Kotri X-1 exploratory well in province of Sindh. The company has 100 percent interest in the said field. Moreover, PPL’s lease of Sui gas field has been extended for a 10-year period by govt. of Balochistan.

Current account deficit in 10MFY16 has narrowed to US$1.52bn (0.6 percent of GDP) against US$1.85bn (0.8 percent of GDP) in same period last year. Moreover, govt. is on track to meet deficit target set by International Monetary Fund (IMF). Country’s budget deficit for 9MFY16 clocked in at ~Rs1.0tn i.e. 3.4 percent of GDP.

Finance Ministry has projected indicative budget ceiling at Rs4.4tn for FY17 against original estimates of Rs4.1tn for FY16, increase of 8 percent YoY. Federal govt. has increased revenue collection target for Federal Board of Revenue (FBR) by 16 percent YoY to Rs3.6tn for FY17.

Ferozsons Laboratories (FEROZ) has obtained manufacturing license along with requisite production technology from Gilead Sciences, Inc. to manufacture an authorized generic of Sovaldi in Pakistan, company informed through a PSX notice. The drug will be produced under the brand name of Savera (Sofosbuvir 400mg) Tablets at MRP of Rs5,868 per 28 tablets. Sovaldi is available in the country at MRP of Rs32,500 per 28 tablets.

During the week, Honda Atlas Cars (HCAR) announced its 4Q2016 earnings of Rs1.1bn (EPS Rs7.9) against Rs1.6bn (EPS Rs11.1) in the same period last year. The result was slightly above expectations.