The Week in Review

For the period Aug 9, 2018 – Aug 16, 2018

News This Week KSE-100 – Geopolitical noise dampened sentiments

 Forex reserves fall to USD16.71bn

 FATF delegation arrives
 Remittances jump 25% in July
 Foreign exchange deposits: Pakistan gets assurance from China,
Saudi Arabia
 Trade deficit in July shrinks to 16.2%MoM as imports drop
 Auto sales climb 9%YoY
 Power sector receivables soar to PKR896bn
 MIGA issues USD66mn worth of guarantees for Hyundai-Nishat
Motors Assembly Plant
 4th Neelum-Jhelum Hydropower Project unit begins operation
Stock Market Overview
 The benchmark index remained under pressure during the week on the back of geopolitical tensions and lack of triggers to entice
investors. The index posted decline of 2%WoW to close at 41,961pts. During the week market participation remained lackluster as
evident from ADT and ADTV that declined by 11.9%WoW and 0.6%WoW, respectively. Foreign investors also exhibited a net outflow
of USD9.5mn.

 IBFL, APL, THALL, UNITY and JLICL were the major gainers while PAEL, DGKC, PTCL, NCPL, and NPL were the major losers in the
benchmark KSE-100 this week.

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KSE-100 – Geopolitical noise dampened sentiments
Date Open High Low Close Change Vol (mn)
10-Aug-18 42,957 43,116 42,799 42,842 -0.2% 250
13-Aug-18 42,813 42,858 42,594 42,638 -0.5% 163
15-Aug-18 42,765 42,853 42,368 42,447 -0.4% 145
16-Aug-18 42,423 42,483 41,751 41,961 -1.1% 142

Market Review
The benchmark index remained under pressure during the week on the back of geopolitical tensions and lack of triggers to entice investors.
The index posted decline of 2%WoW to close at 41,961pts. During the week market participation remained lackluster as evident from ADT
and ADTV that declined by 11.9%WoW and 0.6%WoW, respectively. Foreign investors also exhibited a net outflow of USD9.5mn.

During the week, PAMA released the latest figures for auto industry whereby overall sales of locally assembled cars, light commercial
vehicles, vans and jeeps grew by 9%YoY to 21,344 units during the 1MFY19 as a result of strong backlog of orders during last few months
which were supported by cheap financing and economic expansion. Moreover, power sector's receivables rose by 23%YoY to PKR896bn
from PKR730bn during FY18, a key reason for the continuous hike in circular debt and borrowing from commercial banks by slapping
surcharges on consumers. Also, fourth and last unit of the Neelum-Jhelum Hydropower Project (NJHP) was synchronized with national grid
on Monday after it started generating over 200MW on a trial basis.

On the macro front, foreign exchange reserves of central bank declined to USD10.2bn, down by USD216mn owing to external debt
repayments. Furthermore, Pakistan’s debt and liabilities rose sharply to nearly PKR30trn or 87% of total size of the economy at the end of
previous fiscal year, largely due to the last government’s expansionary fiscal policies and its failure to reform tax administration. In addition
to this, Pakistan’s trade balance recorded a deficit of 16.2% to USD3.19bnMoM in the 1MFY19. Exports for Jul’18 increased 1.2%YoY and
imports for the same period registered a 0.6%YoY rise.

Outlook
With lower trading days in the upcoming week on account of Eid holidays, market participation is likely to remain subdued. Furthermore,
market is likely to track developments in global and regional indices.
 News This Week 2
2
Economic highlights & Data points
Forex reserves fall to USD16.71bn| (The News): Pakistan’s foreign exchange reserves fell to USD16.71bn during the week ended August 10
from USD17.01bn in the previous week, the central bank reported on Thursday. The foreign exchange reserves held by the State Bank of
Pakistan decreased USD216mn to USD10.15bn due to external debt servicing and other official payments, it said.

FATF delegation arrives| (The News): In order to evaluate the performance of Pakistan for placing mechanism to counter money
laundering and terror financing, a six-member visiting delegation of the Asia Pacific Group (APG) has asked Pakistan to strengthen the legal
framework by maximizing penalty and imprisonment period for those proven to be involved in such offences.

Remittances jump 25% in July| (Dawn): : In a positive development, remittances posted their biggest jump in years for the month of July,
rising by 25% compared to the same month last year despite the raging uncertainty that prevailed in the run-up to the elections. The State
Bank of Pakistan (SBP) reported on Friday that the overseas Pakistani workers remitted USD1.93bn in the first month of 2018-19 as
compared to USD1.54bn received last July.

Foreign exchange deposits: Pakistan gets assurance from China, Saudi Arabia| (The News): In a last ditch effort to avoid going back to the
IMF, Pakistan has received assurances from China and Saudi Arabia for solving its foreign exchange crisis but first the incoming PTI-led
government will have to take ‘tough corrective measures’ on front, reducing imports and slashing the budget deficit in a big way. Pakistan
had requested Saudi Arabia to provide USD5bn for deposits to keep into foreign exchange reserves and Pakistan can pay them well on these
deposits in our central bank

Trade deficit in July shrinks to 16.2% month-on-month as imports drop| (The News): Pakistan’s trade balance recorded a deficit of 16.2%
to USD3.19bn month-on-month in the new financial year starting July, though import showed a sign of depression due largely to volatility in
rupee value in recent months. During the period dollar appreciated 4.8% against the rupee. Exports on year-on-year for July 2018 increased
1.2% and imports for the same period registered a 0.6% rise.

Sector and Corporate highlights

Auto sales climb 9%| (Dawn): The overall sales of locally assembled cars, light commercial vehicles, vans and jeeps grew by 9% year-on-
year to 21,344 units during the first month of this fiscal year. With further interest rate hike and rupee devaluation on the cards along with
the ban on non-filers to register new cars, this growth momentum may lose steam in coming months.

Power sector receivables soar to PKR896bn| (BR): The power sector's receivables rose by 23% to PKR896bn from PKR730bn during 2017-
18, a key reason for the continuous hike in circular debt and borrowing from commercial banks by slapping surcharges on consumers, well
informed sources told Business Recorder. The main contribution in receivables was liabilities of private sector which rose from PKR555bn to
PKR671bn.

MIGA issues USD66mn worth of guarantees for Hyundai-Nishat Motors Assembly Plant| (DT): MIGA, a member of the World Bank Group,
has issued guarantees worth USD66mn in support of the design, construction and operation of the Hyundai-Nishat Motor vehicle assembly
plantin M3 Industrial City, Faisalabad.

4th Neelum-Jhelum Hydropower Project unit begins operation| (Dawn): The fourth and last unit of the Neelum-Jhelum Hydropower
Project (NJHP) was synchronised with national grid on Monday after it started generating over 200 megawatts on a trial basis. During the
project’s trial run, the unit will be tested on various loads ranging up to 242MW.
 Stock Market – Last week in pictorals
3
Chart 1: KSE-100 Index Chart 2: KSE Advance/Decline Ratio

Source: PSX Source: PSX

Chart 3: Pak Foreign Portfolio Flows (US$mn; US$=PKR115) Chart 4: KSE- Volumes & Values

Source: NCCPL Source: PSX

Chart 5: Price to Money Ratio Chart 6: Off market activity

Source: NCCPL Source: PSX

 Economy Watch
4
Chart 7: Revenue Collection (PKRbn) Chart 8: Forex Reserves (US$mn)

Source: SBP Source: SBP

Chart 9: Import & Export (US$mn) Chart 10: Foreign Exchange Rate (PKR/US$)

Source: SBP Source: SBP

Chart 11: 6-mth T-Bill Yield (%) Chart 12: Yield Curve (%)

Source: SBP
Source: SBP
Stock Market Synopsis
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Last week This Week %Change 1M 3M 12M
Mkt. Cap (US $ bn) 70.7 69.8 -1.3% 64.0 75.4 87.1
Avg. Dly T/O (mn. shares) 198.8 175.2 -11.9% 224.9 168.0 173.4
Avg. Dly T/O (US$ mn.) 73.3 72.9 -0.6% 76.3 59.9 70.1
No. of Trading Sessions 5.0 4.0 -1.0 22.0 62.0 250.0
KSE 100 Index 42,924.0 41,960.8 -2.2% 39,665.8 42,301.2 44,187.0
KSE ALL Share Index 30,944.7 30,422.0 -1.7% 28,920.0 30,672.7 31,247.7

Chart 13: KSE-100 Active Issues (ADTO-million shares) Chart 14: KSE-100 Least Traded Issues (ADTO- shares)

Source: PSX Source: PSX

Chart 15: KSE-100 Top Gainer (% change) Chart 16: KSE-100 Top Losers (% change)

Source: PSX Source: PSX

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