KSE ends eventful week in defeat

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CARACHI:

The Pakistan Stock Exchange had a rollercoaster week as a mix of political unrest, dismal economic data and rupee devaluation hit the trading environment and dampen investor sentiment.

Political uncertainty and the constitutional crisis dominated the stock market for most of the week and kept the market from posting gains. As a result, the benchmark KSE-100 ended the week with a loss of 708 points or 1.56% to close at the 44,445 level.

“On the news front, the domestic political arena remained heated due to Supreme Court hearings regarding the legality of the decision of the Vice President of the National Assembly,” the JS Global analyst said. , Muhammad Waqas Ghani.

The week started with a bloodbath and the market plunged more than 1,200 points on Monday, mainly due to the dissolution of the assemblies by the president Dr Arif Alvi and the rejection of the motion of no confidence by the vice-president of the Qasim Khan Suri National Assembly.

The twin developments signaled a protracted political crisis in the country and prompted investors to sell their holdings in panic mode and profit.

The trend reversed on Tuesday and the market managed to gain 200 points in a two-day bull run, largely due to market picking.

Certificate prices fell to attractive valuations following a bearish start to the week and investors resorted to value hunting, which supported the market higher.

A drop in international crude oil prices indicated a partial easing of inflationary pressures and led to a bullish trend in the stock market.

On Thursday, the rupee fell to an all-time low of 188.17 rupees against the greenback and, buoyed by the development, the stock market fell again, losing more than 300 points.

Market participants were expecting a further increase in inflation due to the sharp drop in the local currency.

Clarity on the political turmoil rekindled investor interest and the final trading session of the week proved to be a sigh of relief for the market.

The market rebounded after the Supreme Court of Pakistan ruled the decision of the Deputy Speaker of the National Assembly unconstitutional and reinstated the National Assembly.

Moreover, the strong recovery of the local currency against the US dollar, by 3.5 rupees, has raised optimism in the Pakistani stock market.

“While clarity has emerged on the political front, we expect the stock market to show strong signs of a comeback in the coming week,” said a report from Arif Habib Limited.

“Additionally, Chinese loan renewals worth $2.3 billion are likely to be on the cards, which will keep reserves down.”

In the week under review, average daily trading volume fell 51% week-over-week to 153 million shares, while average daily value traded fell 42% week-on-week on the other to $26 million.

In terms of sectors, the negative contributions came from cement (314 points), oil and gas exploration (89 points), power generation and distribution (80 points), engineering (65 points) and food and personal care products (60 points).

On the other hand, the sectors which contributed positively were chemicals (70 points), fertilizers (63 points), cables and electrical appliances (5 points), investment banks/investment companies/investment companies (4 points) and REITs (2 points).

Lucky Cement (145 points), Hubco (60 points), TRG Pakistan (48 points), DG Khan Cement (46 points) and Oil and Gas Development Company (45 points) contributed negatively in terms of certificates.

Meanwhile, the positive certificate contribution came from Engro Polymer and Chemicals (55 points), Systems Limited (26 points), Engro Fertilizers (24 points), Meezan Bank (22 points) and MCB (19 points).

Overseas sales continued this week, reaching $3.78 million, compared to a net sale of $15.55 million last week. Significant sales were seen in commercial banks ($3.8 million) and cement ($1.4 million).

On the local front, purchases were reported by individuals ($14.8m), followed by banks/development finance institutions ($4.7m).

Among other major news, the UAE postponed $2 billion debt payment at the request of the government, cut yields rose up to 80 basis points, the SBP announced a cash margin of 100% on the import of 177 items, with the United States citing support for the constitutional process in Pakistan.

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