LAHORE -  The market continued to display a jittery texture during the week, albeit closing up 1.2 percent WoW at 48,971 points. Average daily volumes showed an improvement of 39 percent WoW, rising to 258 million shares. However, the volumes remained well below FY17TD average daily volumes of 376 million, showing investor's nervousness over the past few weeks where all eyes remained fixed on expected Supreme Court ruling in the Panama-gate case. Smaller sectors such as Glass & Ceramics and Pharmaceuticals were in the limelight during the week, outperforming the KSE-100 index by 6.7 percent WoW and 5.4 percent WoW, respectively.

Among pharmaceuticals, GLAXO (up 4% WoW) was in the limelight, rallying on commencement of trading of its consumer arm, GlaxoSmithKline Consumer Healthcare (GSKCH) following its demerger with the pharmaceutical division. Apart from this, other major news during the week included, Nepra announcing Multi-Year Tariff for KEL (see our Morning Briefing dated March 22, 2017), 2.5 percent YoY decline in textile exports to $995 million during February 2017 and 8MFY17 Current Account Deficit up 121 percent YoY to $5.47 billion.

Experts said that the benchmark index inched up in the outgoing week. Investor activity improved at the bourse with Average Daily Traded volume increased, particularly on the last day of trading where trading volume was in-line with CY17 average. Activity, however, was centred in small-cap stocks as Average Daily Traded Value fell 8 percent WoW as expectation on new margin gained traction. Almost all the sectors closed positive where Pharma & Bio Tech (up 8.4%WoW) and Multiutilities (up 5.0%WoW) were among the major gainers.

Foreigners were net buyers of $3.5 million worth of shares in the outgoing week with Oil & Gas and Fertiliser attracting the most interest (net buying of $3.6m and $2.3m, respectively). Cement sector bore the brunt of selling (net outflow of $4.4m) followed by Power sector (net selling of $1.3m).

Among key data points released during the week were textile export numbers by Pakistan Bureau of Statistics (PBS) where value added segment showed improvement over February 2016 (Readymade garments up 5.4 percent YoY, Knitwear up 2.2 percent YoY while bed wear up 2.8 percent YoY) in terms of value; cotton cloth continued to underperform as its exports fell 14.7 percent YoY in February 2017 in value terms. Moreover, fertiliser off take numbers were released by National Fertiliser Development Center (NFDC) where off take marginally fell (down 0.7 percent YoY) in February 2017.

Investors will be looking forward to meeting regarding the Monetary Policy Statement over the weekend where we believe the central bank will maintain status quo on policy rate currently set at 5.75 percent. Experts believe activity in the market will pick up in the coming week as factors keeping investors at bay, namely Panama case and SECP-broker issue, have subsided for the time being. “Secondly, March-end result season is around the corner and may provide much needed impetus to the market. Improvement in trading activity this week also adds credence to our view,” experts added.