KARACHI: The benchmark KSE-100 index added 1,502 points (up four per cent) to close at 39,049. The market performance improved on the back of rise in international oil prices which boosted the oil and gas exploration companies who accounted for almost one-third of the total weekly gains.

The market began the week with a 1,015-point jumpstart (2.7pc) on Monday mainly due to buoyant investor sentiment over financial support from friendly countries and the lack of local selling. Bulls dominated the session on Tuesday as well, sailing the index past 39,000 as political tensions simmered down.

The index was bolstered by an adrenaline rush of $3 billion agreed with the UAE following the visit from their crown prince. The investment sentiment was further helped by the satisfaction expressed by the Financial Action Task Force (FATF) over the country’s efforts and plans to combat money laundering and terror financing. According to reports, FATF officials asked Pakistani delegation to improve certain areas before May this year in order to get out of the grey list.

News regarding the anticipated new taxes and duties in the upcoming mini-budget to be announced on Jan 23 also remained on the investors’ radar. On the macro side, remittances posted a 10pc increase in 1HFY19 while December’s inflows declined by around 2pc year-on-year. But trade deficit during December clocked in at $2.4m, shrinking by 17pc YoY and 12pc month-on-month.

Amid the ongoing gas crisis crippling the economy, Prime Minister Imran Khan on Wednesday ordered immediate removal of managing directors of both Sui companies. According to official statements, Sui Northern has miscalculated the supply shortfall and expected demand for December whereas Sui Southern didn’t inform the government about faults in the compressors in a timely manner.

Sector-wise, exploration and production emerged as the best performers during the week, adding 606 points to the cumulative gains followed by commercial banks and fertilisers which contributed 600 points. The bullish sentiment was visible in the 18pc jump in participation with average volume traded reaching 140 million shares, while traded volume increasing by 12pc to $46m.

After 35 consecutive weeks of selling, foreigners emerged as net buyers during the week increasing their positions by $0.6m in cement and commercial banks. Amongst local participants, banks were the net sellers offloading $3.5m in power and textile sectors whereas funds closed the week net positive at $6.7m raking up oil and gas exploration stocks.

Expectations of investment from Saudi Arabia are likely to lift the sentiment for the coming week. The Saudi Minister of Energy, Industry and Mineral Resources Khalid bin Abdulaziz Al-Falih arrived in Pakistan on Saturday to inspect the oil refinery site. According to initial reports, Riyadh is interested to invest in renewable energy, petrochemicals and mining sectors. Investors will also watch the outcome of upcoming meeting with the International Monetary Fund closely.

Published in Dawn, January 13th, 2019