KASB Pakistan Market Review

Market Review Update 031317

Dear Clients,

Despite the vote of confidence, KSE-100 expressed disappointment. The Index closed 786 points down to 45,051 with Rs~ 25bn traded. One can only imagine how the index could have (god forbid) reacted had PM lost vote of confidence. Many reasons were cited to justify the movement today; leverage, inflation fears, rumored redemptions and possible change of guards in Punjab assembly. Nothing concrete can be said so far. Redness was enough to jitter small investors – specially the ones investing on leverage.

We feel that the market would recover by the end of this week if government and allied win Senate election that may reassure investors for necessary legislature business & just may be enough to bring the bulls back. InshaAllah

Meanwhile. Prime Minister has approved reversal of income tax exemptions which would disappoint the market as many credits would be reversed. Similarly, IMF & Pakistan are agreeing to a Rs 6trn tax target for next fiscal year – that require massive tax hikes and could be inflationary. The circular debt too has been agreed to be frozen at current levels. These are painful but necessary for sustainable development as honeymoon period under Covid ends & structural reforms begin.

Highest activity was recorded in ANL (+2.59%) with 48.2mn shares traded, UNITY (+2.96%) with 45.4mn shares and TRG (-0.02%) with 35.4mn shares traded. Correction was visible in AGP (-7.4%) and INDU (-6.9%), while STJT (+5.75%) and FCEPL (+1.9%) closed in the positive territory among the KSE-100 constituents.

KASB Research

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