KARACHI: The Pakistan Stock Exchange (PSX) continued its record-breaking upward trajectory in the outgoing week with the KSE-100 index adding 1,008 points (2.41 per cent) to close at an all-time high of 42,849.

Including the 4.97 per cent gains of the earlier week, the last 10 sessions’ cumulative return worked out to a hefty 7.38pc. Ample liquidity in the market led the bulls to propel index higher during the outgoing week, despite a sizeable foreign selling of $27.5 million.

Positive momentum at the start of the week was temporarily derailed by the surprise victory of Republican candidate in the US presidential elections. Taking cue from Donald Trump’s statements on trade, race and world affairs during the campaign, global stock markets witnessed a hefty sell-off as investors took flight in safe-haven assets like gold and yen. But the mellow sentiments in the acceptance speech of the US president-elect, helped to calm the global markets and restore investor confidence.

Average daily volumes at PSX for the outgoing week rose 2pc on a week-on-week basis to 494m shares while average daily traded value increased 15pc to Rs19bn. Second-tier scrips dominated the volume leaders list with BOP generating volume of 337m shares, followed by PIAA 135m, TRG 114m, TELE 98m and SSGC 88m shares.

All major sectors remained in the gainers list. Top three over the outgoing week were cements, chemicals and commercial banks, up 5.5pc, 4.3pc and 2.4pc, respectively. Accounting for the net foreign selling at $27.5m during the week, total net FIPI outflow in November 2016 stood at $8.9m. Banking sector saw net foreign buying of $2.3m, while oil and gas marketing and cement sector witnessed net outflow of $5.3m and $4.6m, respectively.

Among local participants, value buying by individuals of stocks worth $23m and mutual funds $16m, helped to absorb overseas investors’ sell-off.

During the week, the upsurge in KSE-100 index was led by cement and banking sectors. HBL up 2.38pc, UBL 3.19pc, MLCF 14.23pc, DGKC 6.59pc and FCCL 8.82pc. The stocks contributed around 303 points to the index.

According to AKD Securities, major gainers during the week were: AGTL (27.62pc), MLCF (14.23pc), SSGC (8.83pc), FCCL (8.82pc) and FFBL (8.80pc). On the flip side, the biggest laggards included: SHELL (3.12pc), KEL (2.03pc), HUBC (1.57pc), OGDC (1.47pc) and NBP (0.98pc).

Key developments during the week were: Reiteration of the importance of CPEC to meet growth targets by the World Bank, the prime minister’s ordered a committee to finalise PIA’s financial plan, widening of trade deficit by 21.9pc year-on-year to $9.32bn in the first four months of this fiscal year; workers’ remittances dipped by 3.83pc to $6.26bn in in July-Oct and the government’s plan to issue international sukuk worth $500m against Islamabad-Lahore Motorway for budgetary financing.

OUTLOOK: The furore over the results of US presidential election set at rest, investors were likely to shift their focus back on local politics. According to BMA Capital Management, going forward, range-bound trend in near term could not be ruled out with investor participation likely to remain concentrated in fundamentally strong stocks.

“The Panamagate case hearing in the Supreme Court on Nov 15th may exert pressure and can lead to volatility in the market,” analysts at Arif Habib Limited anticipated. Yet the overall market sentiments were thought to be positive given CPEC realisation; PSX divestment, and inclusion in MSCI Emerging Market due in May 2017. Most other pundits, however, advised caution as the index had already ventured deep inside the uncharted territory.

Published in Dawn November 13th, 2016