Lahore   -  The KSE-100 index retained a bearish outlook for the majority of the week, ending down 1.9 percent WoW to close at 40,869.

Volumes remained dull during the week, as average daily traded volumes ended down 26 percent WoW, while a similar picture was evident for daily average traded value, which closed 23 percent WoW in the red zone (US$ terms). Asian markets in general depicted a jittery performance during the week amid (1) escalating tensions between US and China, and (2) increasing uncertainties surrounding Brexit. Moreover, oil prices continued on a downwards path, losing another 5 percent WoW.

Resultantly, E&Ps were among the major losers during the week, shedding 4.8 percent WoW while contributing -329 points to KSE-100 index during the week. Banks shared a similar fate, with the sector contracting by 2.2 percent WoW, with major losers including HBL (down 5.7 percent WoW) and UBL (down 2.4 percent WoW). UBL's winding down of its New York branch added further pressure on the stock. From the international investors' side, the selling spree continued with total net selling of US$11.3mn during the week, compared to US$23.4mn in the previous week. Continued noise on the economic front also added to investors' woes, where the two week long talks with IMF yielded inconclusive results, with further talks to take place to chalk out a plan. On a positive note, foreign exchange reserves increased during the week owing to US$1bn inflows from Saudi Arabia, as per official sources, which will be visible next week. Further pressure was also felt on the last trading day of the week due to the law and order situation, following attacks on the Chinese Consulate in Karachi and blasts in KP province.

Experts said that it was a substandard week for the benchmark index as it fell 791 points (or -1.9 percent) WoW, closing at 40,869 level. Investor sentiments were wounded by the announcement that Pakistan was unable to reach an immediate agreement with the International Monetary Fund (IMF) over a bailout package, to help solve the country’s economic challenges.

The market even refused to react positively to news that Foreign Exchange reserves surged by more than US$1bn WoW to US$8.3bn for the week. This was the first time in 13 weeks that reserves have increased WoW.

Oil prices fell to their lowest in a year, in intraday trading, to US$51.73. This non-stop decline in international oil prices continued to negatively impact E&P’s as they cost the index 329 points for the week, the worst amongst all sectors. Commercial Banks were the second worst performing sector chipping away 278 points.

During the week foreigners were net sellers amounting to US$11.6mn vs. US$24.1mn in the previous week, this is their 29th consecutive-week of selling. While on local front, Insurance and banks were net buyers of US$12mn cumulatively. 

Pakistan Refinery Ltd (PRL) announced its 1QFY19 results, posting LPS of Rs1.4 vs EPS of Rs1.1 in the same period last year. The loss is due to a 400 basis points YoY decrease in gross profit margins, a 89 percent YoY rise in finance costs and a 12 percent YoY increase in distribution costs.

Fiscal deficit in the first quarter of FY19 widens to 1.4 percent. Fiscal deficit in July to September 2018 amounted to Rs541bn. Fiscal deficit in July to September 2017 amounted to Rs440bn. Principle and interest payment amounted to Rs507bn. Principle and interest payment last year amounts to Rs 445bn. Defense expenditure amounted to Rs219bn during July to September 2018. Defense expenses during July to September 2017 totals at Rs182bn. Total revenue and expenses July- September 2018 was Rs 1.1tn and Rs1.6tn respectively.

During the week, the State Bank of Pakistan’s foreign exchange reserves increased by some $1b during the last week due to inflows from Saudi Arabia. According to official announcement, SBP has received $1b as on November 19, 2018 as placement of funds by Saudi Arabia, after which SBP's reserves surged to US$8.3bn end of the week compared to US$7.3bn as on November 16 2018.