Equity market likely to respond positively on expected finance bill

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KARACHI: The equity market likely to react positively to the clear direction of the government following announcement of Finance Bill expected to be presented next week.

Analysts at Arif Habib Limited said that with Ashura to be observed on next Thursday and Friday, the coming week is expected to have three working days.
The new government will announce amendments to the Finance Bill 2018-2019 on Tuesday, which will dictate its economic policies for the future. With that being said, a positive sentiment is most likely to prevail amongst the investors as a clear direction will be defined, which will help overcome economic challenges.
The KSE-100 index remained choppy during the week, and closed at 40,920 points, up by 65 points WoW. The week began on a negative note as investors lacked confidence on the outcome of ECC meeting regarding gas and electricity tariff hike.
Furthermore, market witnessed some pressure during the week on the back of concerns pertaining to cut in Federal PSDP, increase in custom duties and regulatory duties through amendment in finance bill.
Sector-wise positive contributions came from i) Oil & Gas Exploration Companies (159 points), ii) Fertilizer (55 points), iii) Textile Composite (37 points), iv) Technology & Communication (31 points), and v) Power Generation & Distribution (25 points). Whereas, negative contributions came from i) Commercial Banks (207 points), and ii) Automobile Assembler (35 points). Scrip-wise positive contributions were led by POL (54 points), DAWH (52 points), PPL (50 points), OGDC (45 points) and NML (30 points).
Foreign selling continued this week clocking-in at USD 26.1mn compared to a net sell of USD 9.9mn last week. Selling was witnessed in Commercial Banks (USD 12.1mn) and Cement (USD 8.9mn). On the domestic front, major buying was reported by Insurance Companies (USD 11.8mn) and Mutual Funds (USD 10.6mn). Volumes during the week settled at 139mn shares (up by 0.2 percent WoW) while value traded arrived at USD 47mn (up by 19 percent WoW).
Other major news: i) Reserves fall USD 300m, ii) Auto sales fall 6pc in two months, iii) ECC again defers gas price hike decision, iv) Remittances jump 13.5 percent in July-Aug, v) ‘No plan to discontinue PKR 5,000 note’, vi) FBR collects PKR 547bn in tax on oil sales in FY18.

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