B+ Weekly Analysis

B+ Weekly Analysis 

• Political uncertainty and selling in oil stocks amid falling international crude prices, which hit a three-month low, wiped off the early gains
• Oil prices fell during the week by about 2%, reeling from the effect of Greece’s financial crisis and China’s stock market woes, leading to a considerable battering of the exploration and production (E&P) sector (down an average 5.5% WoW)
• Hascol hit its upper circuit within the first hour of trading, similarly Pakistan State Oil, Pakistan Oilfields Limited and Pakistan Petroleum Limited ended 0.7%, 0.6% and 0.3% higher, respectively
• The cement sector continued to outperform others on strong June 2015 sales, while insurance stocks (+4% WoW) also attracted investor interest
• The banking sector remained impressive on rising deposit growth and increasing yields of treasury bills
• Among market-moving news, the debate over the controversial banking transaction tax heated up until the government and traders reached an agreement on Thursday to bring down the 0.6% withholding tax to 0.3% for the non-filers of tax returns till September 2015
• Foreign funds flew out of the market, with foreigners selling $23 million worth of holdings compared to $1.6 million last week
• NEPRA has made electricity costlier by 20 to 80% for domestic consumers of K‐Electric by slashing the amount of subsidy as per agreement with the IMF. The impact of reduction in subsidy for domestic consumers will be between PKR2 to PKR4.28/unit \
• The government plans to borrow PKR1.35tn through the banking system in the 1QFY16. The government has slashed the selling of PIBs by limiting them to PKR200bn during the quarter
• The NBP in collaboration with HBL is planning to invest PKR80bn in a 1,200MW power generation project
• 150MW solar power plants: Pakistan, Norway companies sign MoU
• Mughal Group of Industries has planned a 55MW coal‐fired power plant to be setup in Sheikhupura with an estimated cost of USD141.701mn
• SSC on Water and Power headed by Senator decided to conduct a performance audit of KElectric through Auditor General of Pakistan aimed at judging the performance of the power utility
• Major gain was seen in Life Insurance (5.0%), Non Life Insurance (4.3%) and Cement (3.5%), while major decline was witnessed in Oil & Gas (3.9%) and Telecom (3.2%), during the outgoing week
• Pakistan’s fx reserves rising to highest ever levels of US$18.7bn as of last week, following inflows from the IMF, where the SBP’s reserves now stand at US$13.5bn