Stock Market at a Glance

MARKET THIS WEEK Foreign selling (US$16mn this week adding to US$6mn selling last week) and apprehensions related to the same remained the key theme of the week at the KSE. Despite the reintroduction of the much-awaited leverage product and a resolution to the simmering diplomatic crisis between Pakistan and the United States, the market declined 3.6% WoW. Macro news flow remained mixed where additional revenue measures of PRs53bn were implemented via a Presidential Ordinance. While this could strain corporate profitability to a certain extent (up to 2.5% impact of 15% flood tax on 2011 profits), the same should bode well from a broader macro viewpoint. The new measures target to address the fiscal situation and GoP borrowing from SBP and should in turn have positive implications for Pakistan's negotiations with the IMF.