Stock market at a glance.

Market Review

During the outgoing week, KSE100 index remained flat amid lack of triggers, closing at 38,531pts. Market participation remained dull as evident from decrease in ADT which declined by 10.1%WoW, on the other hand ADTV increased by 6.6%WoW. Foreign investors were net buyers, exhibiting an inflow of USD3.1mn. During the week, ECC allowed PIA to temporarily hold up around Rs96 billion in payments the airline owe to the Civil Aviation Authority (CAA). The committee also approved a proposal of ministry of industries and production to allocate 66mmcfd additional Mari deep gas to PPIB for power generation purposes.

Additionally, amid an overbilling inquiry, the government shuffled SNGPL's top management. Furthermore, the government is planning to increase electricity rates by PKR3.26/unit in coming months in order to meet revenue requirements of power distribution companies (DISCOS). On the macro front, foreign exchange reserves held by SBP increased by USD733mn to USD8.8bn due to inflows from UAE. Additionally, the country is expected to receive USD2.1bn loan from China within the next week.

Pakistan has also requested the Asian Development Bank to approve USD500mn in budgetary support before June this year, as it faces difficulties in retaining foreign exchange reserves because of mounting external financing needs. Additionally, the country's current account deficit shrunk by 59%MoM in Feb'19 to USD356mn.

Outlook

Monetary policy is due in the upcoming week where we expect a hike of 50bps, where any negative surprise would dampen the market participation.

News This Week

Economic highlights and data points

Foreign reserves cross USD15bn mark (BR): The country's total liquid foreign exchange reserves have crossed USD15bn mark supported by arrival of inflows from UAE. According to State Bank of Pakistan's (SBP) weekly report issued on Thursday, the country's total liquid foreign reserves increased by USD744mn to USD15.71bn as on March 15, 2019 compared to USD14.97bn as on March 8, 2018.

Pakistan to receive loan worth USD2.1bn from China by Monday: finance ministry (Dawn): The Ministry of Finance has announced that the State Bank of Pakistan (SBP) will receive a 15bn yuan loan, equivalent to USD2.1bn, from China by Monday. The loan facility, the spokesperson said, "will further strengthen foreign exchange reserves and ensure balance of payment stability."

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