Volatility in crude oil prices and heightened tensions in the Middle East kept investors cautious, according to Arif Habib Ltd (AHL), as Pakistan’s benchmark KSE-100 index closed the week largely unchanged.
The KSE-100 ended at 170,765 points, down 120 points, or 0.1 per cent, from the previous week’s close of 170,885 points. Expectations of progress in US-Iran talks and softer oil prices supported the market at the start of the week, but renewed geopolitical concerns and rising crude prices later erased those gains.
Topline Securities highlighted the signing of long-awaited refinery upgrade agreements by four of the country’s five oil refineries — Attock Refinery Ltd (ATRL), Pakistan Refinery Ltd (PRL), National Refinery Ltd (NRL) and Cnergyico PK.
The agreements were signed with Inter State Gas Systems (Pvt) Ltd under the Pakistan Oil Refining Policy for the Upgradation of Existing/Brownfield Refineries. The projects are expected to attract around $5 billion in investment over the next five years.
The investment will focus on modernising refining facilities, boosting production of cleaner Euro-V fuels and reducing furnace-oil output.
Average daily trading volume increased 48.2pc week-on-week to 670.2 million shares, while the average value traded rose 7.7pc to $80.7 million.
Among sectors, fertiliser companies made the largest positive contribution to the index, adding 171 points. Exploration and production companies contributed 120 points, followed by oil marketing companies with 100 points, refineries with 89 points and investment banks with 87 points.
Banking stocks exerted the biggest drag on the index, reducing it by 366 points. Miscellaneous companies contributed a 141-point decline, followed by power stocks at 140 points, technology at 103 points and auto parts at 24 points.
Among individual stocks, Engro Fertiliser was the biggest positive contributor, adding 151 points. Habib Bank, Attock Refinery, PSO and Pakistan Petroleum were the other major contributors.
Pakistan Services Ltd recorded the largest negative contribution, followed by MCB Bank, National Bank, Systems Ltd and K-Electric.
AKD Securities said global energy markets remained unsettled amid the US-Iran conflict and mixed signals emerging from the United Nations General Assembly session in New York. Brent crude settled 1pc higher week-on-week at $104.9 per barrel.
On the domestic front, power generation rose 5.1pc year-on-year to 14,943 gigawatt-hours in August, marking the third-highest August output on record. The increase was supported by higher hydropower, coal, gas and wind generation.
However, average power generation costs increased because of greater reliance on regasified liquefied natural gas (RLNG) and furnace oil, along with elevated international oil prices.
Oil production increased 1.4pc week-on-week to 68,500 barrels per day, mainly due to higher output from Makori East, Maramzai and Mardankhel fields.
Gas production, meanwhile, declined 2.5pc to 2,934 million cubic feet per day because of lower output from Mari, Uch, Kandhkot and Shewa.
Pakistan’s combined oil and gas reserves stood at 3,720 million barrels of oil equivalent in June. Oil reserves increased 15pc year-on-year to 276 million barrels, while gas reserves rose 9pc to 20,664 billion cubic feet. Newly discovered fields added 53.5 million barrels of oil and 773 billion cubic feet of gas to the reserves base.
The country’s total liquid foreign exchange reserves increased 0.07pc week-on-week to $26.8 billion as of Sept 18. Reserves held by the State Bank of Pakistan rose to $21.4bn, while commercial banks held $5.41bn. The import cover remained at 3.03 months.
Petroleum prices moved in opposite directions under the latest daily pricing mechanism. High-speed diesel prices fell Rs11.92 per litre week-on-week to Rs412.12, while petrol prices edged up by 14 paise to Rs389.28.
The rupee appreciated 0.03pc against the US dollar to close at Rs277.16.
Other economic indicators showed that broad money supply declined 0.7pc week-on-week to Rs44 trillion as of Sept 11. Weekly inflation accelerated to 11.92pc year-on-year during the week ended Sept 24.
AKD Securities identified the International Monetary Fund (IMF) review as a key near-term catalyst for the market. Developments in US-Iran talks and movements in international oil prices are also expected to remain important factors influencing investor sentiment.
The KSE-100 was trading at a forward price-to-earnings ratio of around 7.2 times, according to the brokerage.
