Stock market at a glance.

• Position: Report

Market Review

The outgoing week remained green where benchmark index closed at 40,265pts, exhibiting an increase of 2.4%WoW. Market participation increased post announcement of 'Economic Reform Package' that focused on boosting investor's confidence in the market. This is evident from an increase in ADT and ADTV by 43%WoW and 22%WoW, respectively. Foreign investors were net buyers, exhibiting an inflow of USD17.0mn. During the week, the government in its 'Economic Reform Package' abolished super tax for non banking sectors, relaxed tax on intercorporate dividend and removed 0.02% WHT on stock market transactions. Furthermore, the decision of lifting ban on the purchase of vehicles up to 1300cc by non-filers was hailed by auto assemblers. Also, the cabinet approved 50% waiver in GIDC to settle outstanding dues.

Moreover, World Bank rated the progress of Dasu Dam project as 'moderately unsatisfactory' as the country could not resolve the issue of land acquisition which would delay the inauguration of first phase beyond 2021. Additionally, IMF lowered the growth forecast for Middle East, North Africa, Afghanistan and Pakistan by 0.3% to 2.4% for 2019 and recovering to 3.0% in 2020. On the macro front, foreign exchange reserves of the SBP dropped by USD265mn to USD6.63bn owing to debt repayment. Also, the country received USD1.0bn each from KSA and UAE to help boost the country's declining foreign exchange reserves. Additionally, the Finance Minister revealed that a support package from China is also in progress and would be finalized in the next 2 weeks to bring the country out of balance of payment crisis.

Outlook

Monetary policy is due in the upcoming week where we expect status quo, however, negative surprise would dampen the market participation. Additionally, the commencement of result season would play an important role in dictating the direction of individual stocks.

News This Week

Economic highlights and data points

Foreign exchange: SBP reserves dip 3.84%, stand at USD6.6bn (Tribune): The foreign exchange reserves, held by the central bank, continued to descend for the fifth consecutive week, dropping 3.84% on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday.

SBP says USD1bn support fund received from UAE (The News): State Bank of Pakistan (SBP) said on Thursday it had received USD1bn from United Arab Emirates (UAE) as part of a USD3bn support package to help boost the country's dwindling...