The Abacus Prompt - June 2016 Issue

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Stock Market

  • The KSE-100 index increased by 4.78% MoM, closing at 37,784 pts
  • Average daily turnover decreased ~36% MoM to 172 mn shares
  • Foreign investment (as measured by FIPI activity) recorded a net buy of USD 74.13 mn in June compared to USD 3.62 mn last month
  • Individuals were the largest buyers with a net buy of USD 82 million; comparatively, companies were the largest sellers (USD 168mn)
  • Top growing sectors during the month were the Banking  (8.1% MoM), IPP’s (3.8% MoM) and Construction & Materials (3.4% MoM)

Currency and Commodity Markets

  • The PKR appreciated by 0.05% MoM against the USD, almost 8% MoM against the GBP, and 0.85% MoM against the EUR during June
  • Domestic Gold prices increased 4.18% MoM. Similarly, domestic silver prices increased 11.43% (both largely a result of the Brexit fallout)
  • WTI Crude decreased by 1.39% MoM. Domestic HSD and Motor Spirit prices –set during the first of June – remained unchanged
  • Cotton (KCA) prices increased 2.7% MoM to PKR 5,750/maund
  • Urea prices remained unchanged at PKR 1,819/bag
  • Cement dispatches were 3.35 mn tons, down 7.46% MoM and up 2.45% YoY. Prices remained unchanged at about PKR 513/50kg bag

Macroeconomic Profile

  • The policy rate remained unchanged at 5.75%
  • Forex Reserves increased by USD 1.49 bn MoM to USD 23.09 bn
  • CPI Inflation was recorded at 3.20% YoY
  • Exports decreased by 9.84% MoM to USD 1.65 bn and imports increased by 11.40% MoM to USD 4.47 bn; resultantly, the trade deficit widened by 29.22% MoM to USD 2.82 bn
  • Foreign remittances increased by 15.2% MoM to reach USD 2.07 bn 
  • Federal tax collection was recorded at about PKR 458 bn
  • FDI was recorded at USD 197.5 mn, up from USD 64.3 mn last month

News Highlights

  • The Federal budget FY2016-17 was unveiled by the GoP. Broad-based salient features include a total budget outlay of PKR 4,894.9 bn (10% higher YoY), revenue collection of PKR 3.601 tr (16% higher YoY), and a budget deficit of 3.8% of GDP (down from 4.2% in FY 16)
  • Pakistan’s benchmark index was re-classified into the MSCI’s emerging market index, leading to the PSX climbing to a record high during June
  • The ECC approval the newly formed Pakistan LNG Terminals Limited to direct the successful bidder – PGP Consortium Limited (comprised of Fauji Oil Terminal and Distribution Company Limited and Pakistan GasPort Limited- to proceed with the construction of Pakistan’s second LNG terminal
  • Britain held a referendum on June 23, 2016 on whether to leave the EU; the country voted to leave the EU, as “leave” voters won the referendum by a slim margin of 52% against 48% of “remain” voters. This led to the resignation of British PM David Cameron