A Weekly 1Review

NNEXURE
Week in Review: Sep 19 Sep 23

KSE-100 INDEX GAINS 253 POINTS WOW A TALE OF TWO HALVES

The KSE-100 index closed in KSE-100 Index Weekly Performance the positive, up 253 points 140 11,900 (+2.2% WoW) despite 120 11,800 experiencing bearing 100 11,700 sentiments in the latter part of the week. Investor activity 80 11,600 seemed buoyant with Av. daily 60 11,500 volumes increasing 45% WoW 40 11,400 to stand at 72mln shares. Although foreigners remained 20 11,300 net buyers during the week, the 0 11,200 contradictory sentiments in the Sept-19 Sept-20 Sept-21 Sept-22 Sept-23 market were caused by a Volume Index foreign sell-off in the last two days of the week, owing to fresh concerns over the global debt crisis and gloomy economic outlook by the heads of IMF and WB. The Federal Reserve announced a new quantitative easing policy to stimulate the US economy. Dubbed Operation Twist, the policy includes twisting of the current portfolio of short-term bonds held by the Fed by trading them for longerterm maturities, thereby artificially stimulating long-term demand. Such a measure failed to attract investor interest as US stocks slipped near to 2-year lows with effects felt in Asian markets as well. Nevertheless, the KSE maintained sanctity and fared well in comparison to regional peers. This was owing to disciplined macroeconomic data released with the CPI coming at 11.7% (after accounting for base year change), C/A deficit standing at USD 189mln, and healthy foreign exchange reserves.
Volumes (mln)

Futures Market
Av. Daily Volume Av. Daily Value Futures Spread
Source: KSE

KSE-100 Index

5.44 523 8.47 %

+4 % + 22 % + 81 bps

Top 5 Future Value Leaders

Future POL-SEPT FFBL-SEPT PSO-SEPT NBP-SEPT FFC-SEPT
Source: KSE

Value 139.4 129.3 70.0 45.6 26.3

Spread 5.2 % 17.0 % -3.4 % 6.8 % -0.3 %

Top 5 Volume Leaders

Weekly Market Wrap-up

Open High Low Close +/- % +/- points Av. Daily Volume
Source: KSE

Ready Market

Stock JSCL FFBL NBP LOTPTA FATIMA

Source: KSE

Volume 30.44 27.77 22.88 21.20 14.12

% - 0.3 % + 5.0 % + 3.3 % - 5.0 % + 2.3 %

11,353 11,891 11,342 11,607 + 2.2 % + 253 71.8mln MTS Investment

MTS
75 mln 8.8 % + 27.1 % + 1.1 % Rate
Source: KSE

STOCK SPECIFIC ACTIVITY: During the week, banking sector stocks outperformed other sectors owing to measures taken by the GoP to resolve the circullar debt issue through which the issuance of PIBs to banks was finalized. This would effectively make the GoP as an intermediatary between the banks and IPPs with the government taking on the responsibility of ensuring timely payment to the financial institutions; a move that was taken positively by investors. In addition to this, the lower CPI figures although distorted due to the base year effect and solid reserve levels have provided confidence to the MoF resulting in the decission to end the IMF standby support program temporarily. FORWARD LOOKING EXPECTATIONS: A decision to suspend the IMF agreement provided confidence to investors alike about the macroeconomic stability of Pakistan. Moreover, the relatively stable exchange rate (1.8% decline YTD compared to much larger declines witnessed for regional countries) support the view of a possible discount rate cut and growing confidence in the capital markets of the country. However, analyst expectations of a 100bps cut in the policy rate may be preemptive. We expect a relatively less aggressive approach by the SBP, given previous experiences, culminating in a 50bps cut instead in the MPS to be announced on Oct 08, 2011. In the coming week, we expect foreign investors to play a vital role in driving market sentiments which, inturn, depends upon the prospects of easing in the global markets on the back of positive news flows regarding the EU debt crisis and the impact of Fed policy measures.

Economic Indicators GDP Growth FY12E Per Capita Income FY12E Forex Reserves (15-Sep-11) Inflation CPI (YTD) Exports (July 11- Aug-11) Imports (July 11- Aug-11) Trade Balance (July 11- Aug-11) Current A/C (Aug-11) Remittances (Aug-11) 10-year Bond Yield (Aug-11) 2.80% $ 1,150 $17.58bn 13.77 $4.17bn $7.50bn $(3.33)bn $(75)mn $1.30bn 13.25%

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KSE-100 RSI: 56.88

Selling Pressure
1 2

Neutral 3

Buying Pressure 4 5

KSE-100 Fibonacci Expected Support Levels Support Level 11,430

Source: FCRA Research

Resistance Level 11,965

Foreign / Local Portfolio Investment (USD mln) FIPI 1.683 IN Companies (5.463) OUT Banks / DFI 8.213 IN Mutual Funds 1.074 IN NBFC (0.576) OUT Individuals (4.618) OUT Others (0.312) OUT
Source: NCCPL

KSE-100 Top Performers / Losers

AHL PAKRI MTL KOHE FABL ----

Sectoral Performance
15% 14% 12% 10%
9%
7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Oil & Gas Chemical Cement Power Textile Banks -1.0% 2.4% 1.3% 1.3% 5.8%

1.1%

-6%
-9%

NETSOL PPL MARI SPL BCL

0.5%

-10% -13%
-13%

10%

20%

30%

-40%

-30%

-20%

-10%

Top Sectors Based on Volumes

Others 22% Oil & Gas 9%
China 4.00%

40%

0%

Regional Market Performance

India Indonesia Korea Malaysia Taiwan PAKISTAN 2% 2.00%

Chemicals 31%

0.00% -2.00% -2% -4.00% -5%

Financial 11%

-6.00% -8.00% -10.00%

-5% -7% -8%

Banks 21%

Power 6%

-12.00%

-11%

Financial Consultants & Risk Analytics | Room 204, Second Floor, Lahore Stock Exchange Building, 19-Khayaban-e-Aiwan-e-Iqbal, Lahore, Pakistan Phone: +92 (42) 36312222 | Fax: +92 (42) 36368303 Email: fcraresearch@gmail.com