Stock market at a glance.

Market Review

The benchmark index remained bearish throughout the week where KSE100 index declined by 4.4%WoW to 37,518pts. The volatility in KSE100 index remained heightened as wide swings tracked regional indices and governments decision to enter the IMF program. During the week, market participation improved as evident from ADT and ADTV which surged by 55%WoW and 48%WoW, respectively. Foreign investors remained net seller, exhibiting an outflow of USD32.6mn.

During the week, PAMA released automobiles data for 1QFY19 wherein auto sales came down by 4%YoY to 58,351 units. However, sales grew by 3%YoY in Sept'18 to 19,345 units, up by 10%MoM. Also, APCMA released cement offtake for the month of Sept'18 where domestic cement consumption bounced back in Sept'18 after two months of lacklustre growth. Cement consumption increased by 19%YoY to 3.8mn tons in as compared to 3.2mn tons in SPLY. Moreover, urea manufacturers raised prices by around PKR130/bag in an attempt to pass the impact of gas price hike onto consumers.

On the macro front, SBP foreign exchange reserves declined by USD100mn during the week to USD8.3bn owing to external debt servicing. Moreover, trade deficit narrowed 1.6%YoY to USD8.9bn in the 1QFY19 as compared to USD9.0bn in the corresponding period last year. During 1QFY19, exports increased by 4.6%YoY to USD5.4bn while imports inched up 0.63%YoY to USD14.3bn. Remittances, during the same period, jumped by 13%YoY indicating inflows were higher from all sources except GCC countries. Furthermore, Asian Development Bank (ADB) plans to provide USD7.1bn in financing to help Pakistan achieve inclusive and sustainable growth over the next three years.

Outlook

With the government approaching the IMF in the upcoming weeks, investors will track the developments on conditions associated with entering the program. Additionally, the ongoing result season would also play its role in dictating the direction of individual stocks.

News This Week

Economic highlights and Data points

Forex reserves fall USD100mn (The News): Pakistan's official foreign exchange reserves fell USD100mn to USD8.3bn in the week ended. The State Bank of Pakistan's (SBP) foreign exchange reserves stood at USD8.4bn during the preceding week.

Exports grow by 4.6% (Dawn): Exports grew by 4.6% during the first quarter of the current fiscal year despite government's efforts to bring double-digit growth.

Remittances up 13% to USD5.4bn (Dawn): The country received 13% more...