During the week ended 25th March 2016 trading at Pakistan Stock Exchange witnessed more than 32 percent decline in average daily traded volume to 112.9 million shares. The benchmark PSX-100 Index declined marginally by 0.62%WoW to close at 32,877 levels amid volatility in global crude oil prices and lean trading. The market remained devoid of triggers and unease aggravated due to roll‐over week.
Announcement of Automotive Development Policy 2016‐21 further dented sentiments for listed auto assemblers. Other news highlights from the week were: 1) current account balance for Feburary’16 posting a surplus of US$157 million as compared to a deficit of US$590 million for January’16 taking FY16 to date current account deficit to US$1.86 billion as against US$1.95 billion for the corresponding period of previous year, 2) LSM registering 4.12%YoY growth in first seven months on current financial year, 3) HUBC announcing reduction of stake in China Power Hub Generation Company, 4) imposition of 15% additional Regulatory Duty on import of finished iron and steel products till June 30, this year, 5) MARI planning to increase 150‐200mmscfd hydrocarbon output to avail higher prices and 6) US Fed requiring NBP’s New York branch to devise a plan to improve compliance with anti‐money laundering practices.
Performance leaders during the week were DGKC, MLCF, MCB and SNGPL, while laggards included NBP, KEL, APL and OGDC. Volume leaders during the week were DFML, TRG, KEL, BoP, and SNGPL. Lack of foreign interest persisted during the week with net outflows of US$2.31 million, albeit lower than US$7.64 million recorded a week ago.
The central bank was scheduled to announce this months’ MPS over the weekend, where analysts expected it to keep interest rate unchanged at 6.0%. However, with market participants eyeing a cut, maintaining status quo can favor the banking sector. Moreover, March’16 CPI inflation due next week will determine the direction of monetary policy during the year. While remaining directionless over the immediate term, triggers can emerge over the medium term from the next earnings season, following announcement of Budget for FY17 and Pakistan’s review for classification as MSCI Emerging Market.