The Abacus Prompt - October 2016 Issue

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Stock Market

  • The KSE-100 index decreased by 1.60% MoM, closing at 39,893 pts
  • Average daily turnover decreased 19.5% MoM to ~446 mn shares
  • Foreign investment (as measured by FIPI activity) recorded a net buy of USD 2.02 mn in Oct
  • Mutual Funds and NBFC’s were net buyers of ~USD 100 mn and ~USD 180 mn respectively, whereas companies were net sellers of ~ USD 120 mn
  • Top growing sectors during the month were Oil & Gas Marketing Companies, Commercial Banks and Chemical sectors, whereas Power and Generation, Cement and Oil & Gas exploration were major losers

Currency and Commodity Markets

  • The PKR depreciated by 0.9% MoM against the USD, but gained 5.1% MoM against the GBP and 1.6% MoM against the EUR during Oct
  • Domestic Gold prices decreased by 0.4% MoM. Domestic silver prices remained unchanged
  • WTI Crude decreased 4.0% MoM. Domestic HSD and Motor Spirit prices –set during the first of Oct – remained unchanged
  • Cotton (KCA) prices decreased 1.67 MoM to PKR 5,900/maund
  • Urea prices remained unchanged at PKR 1,446/bag
  • Cement dispatches were 3.53 mn tons, up 12.9% YoY. Prices remained unchanged at about PKR 553/ bag

Macroeconomic Profile

  • The policy rate remained unchanged at 5.75%
  • Forex Reserves increased by USD 0.57 bn MoM to USD 24.19 bn
  • CPI Inflation was recorded at 4.20% YoY
  • Exports increased by 14.29% MoM to USD 1.76 bn and imports increased by 4.40% MoM to USD 4.03 bn; resultantly, the trade deficit decreased by 2.16% MoM to USD 2.27 bn
  • Foreign remittances decreased by 3.11% MoM to reach USD 1.56 bn
  • Federal tax collection was recorded at about PKR 235.0 bn
  • FDI was recorded at USD 67 mn, down from USD 137 mn last month

News Highlights

  • Protest calls and the planned shutdown of Islamabad by opposition parties triggered a significant sell off in equities, as well as the arrest of a large number of PTI party workers and the blockade of the roads leading to Islamabad by the federal govt.
  • S&P improved Pakistan’s long-term credit ratings from B- to B with a stable outlook and also upward revised its forecasted GDP growth rate
  • Terrorists stormed a police training college in Quetta leading to the death of 51 cadets and the injury of a further 97
  • The Abraaj Group entered a definitive agreement for the divestment of its stake in KEL to Shangai Electric Power for USD 1.77 bn
  • A comprehensive textile-sector bailout package worth approx. PKR 175 bn was finalized and sent to PM Nawaz for final approval