LAHORE – In one of the biggest upsets in the history of US Elections, Republican nominee Donald Trump defeated Democrat Hillary Clinton by a wide margin.

Taking cue from Trump’s statements on trade, race and world affairs during the campaign, global markets witnessed hefty intra-day sell-off and flight towards safe-haven assets like Gold and Yen, only to recover partially towards the end of the day after hearing a well composed statement from the elected president.

Pak equities followed international equity markets and continued to extend positive returns (KSE-100 index closed at 42,849pts, up 2.4 percent WoW). Overall activity spiked up as well as gauged from increase in average volumes (+2 percent WoW to 494n share/day) and ADTO (+15 percent WoW to $178m/day). In-line with global jitters, foreigners turned to be net sellers of a hefty $28mn during the week where value buying by local Mutual Funds ($16m) provided respite to temporary plummet.

Other key highlights of the week were; reiteration of the importance of CPEC to meet growth targets by World Bank, the prime minister forming body to finalise PIA’s financial plan, release of trade deficit numbers (+4.5 percent YoY in Oct-16; +22.0 percent YoY in 4MFY17), remittances clocking in 1.2 percent YoY higher in Oct-2016 but 5 percent YoY lower in 4MFY17, MTBs auction fetching Rs292b against target of Rs250b with cut-off yields increasing by 4bps, release of cement sales numbers (+9.57 percent YoY in 4MFY17; +12.87 percent in Oct-16) and PSO receivables swelling to Rs252b.

Experts said that the benchmark KSE-100 index witnessed a volatile trend throughout the outgoing week on the back of US Presidential Election results and uncertainty in international markets. Despite of foreign selling of $27.5m, the local bourse gained, led by local liquidity. The index made an all time high, to close at 42,849 level, up 1,008 points (2.4 percent) over last week.

Average daily volumes for the outgoing week posted a growth of 2 percent WoW to 494m shares while average daily value increased 15 percent WoW to Rs19b/$178m over the week. All of the major sectors remained in the gainer list. Top three gainers over the outgoing week were Cements, Chemicals and Commercial Banks, up 5.5 percent, 4.3 percent and 2.4 percent, respectively.

Foreigners were net sellers of $27.5m during the week. Banking sector saw net buying of $2.3m, whereas Oil & Gas Marketing and Cement sector had net selling of $5.3m and $4.6m, respectively. During the week, World Bank report “Pakistan Development Update” launched, projecting that Pakistan’s Gross Domestic Product (GDP) growth will accelerate to 5 percent in FY17 and 5.4 percent in FY18.

As per the State Bank of Pakistan (SBP), the country’s total liquid foreign exchange reserves amounted to $24.2b on November 4th, down 0.15 percent WoW. According to a statement released by the central bank, the decrease in reserves was due to payments on account of external debt servicing.

Inflows of workers’ remittances, posted a decline of 5 percent during 4MFY17, compared to the same period year. According to State Bank of Pakistan (SBP), overseas Pakistani workers remitted $6.3b during July-October, FY17 compared to $6.5bn in the same period of last fiscal year, depicting a decline of $249m.

Pakistan recorded a trade deficit of $9.3b in the first four months of the ongoing fiscal year, widening 22 percent YoY, as exports failed to recover while imports kept increasing during the July-October period. Trade deficit remained higher than expectations during the period.

The National Electric Power Regulatory Authority (NEPRA) approved a refund of Rs0.84/unit to K-Electric (KEL) consumers under the fuel price adjustment formula for the month of September 2016.

 

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