Pakistan Market October Review and Outlook

KSE logoResults season (9MCY15/1QFY16), kept the sentiments bullish and benchmark of Karachi Stock Exchange, KSE-100 index closed October 2015 at 34,262 points, posting an encouraging gain of 6.57%MoM.

Index heavy-weights, Oil & Gas (on higher global oil prices) and Banks (on better than expected earnings performance) contributed over 50% to market’s overall gain. Largely remaining unexciting, positive earnings surprise by Autos and OMCs also kept the respective sectors in the limelight.

Daily trading volumes remained lean at around 208 million shares, declining by 6.3%MoM in the month under review as compared to slightly more than 222 million shares.

Foreign selling persisted with an outflow of US$50.6 million, marking the third largest outflow in CY15. Commercial Banks (US$15.5 million), Fertilizers (US$13.9 million) and Textiles (US$10.8 million) being the most affected.

With result season now coming to an end, analysts expect the market to move in tandem with: 1) movement in global oil prices, 2) foreign flows and 3) upcoming Monetary Policy Statement due in November, the central bank likely to maintain the rate.

Furthermore, on the back of approval of the incentive package (imposition of 10% regulatory duty on import of yarn and reduction in EFF, LTF rates) and currency weakness, Textiles gained 4%MoM.

Cements on the other hand, posted muted gains of 2% as price performance remained restricted on concerns of a possible price war.

While foreign selling persisted, local participants largely remained active on the buying side with Mutual Funds purchasing equities worth US$40 million. Companies and NBFCs followed suit with a net buy of US$7.6 million and US$9.2 million respectively.


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