KARACHI: Stocks remained volatile in all but the last session of the outgoing week. In the first three sessions, KSE-100 index lost 881 points but managed to recover 486 points on Friday, representing net loss of 396 points (0.9 per cent) for the week. The benchmark index closed at 42,447 points.

Investors remained sceptical amid concerns over the country’s depleting foreign exchange reserves and poor balance of payments situation. Fitch Ratings raising issues about Pakistan’s economic challenges and the International Monetary Fund programme coupled with news regarding legal actions against cement companies and Mansha group, weighed on overall investor’s sentiment.

The negativity in the market was also a result of spillover of depressed sentiment in the European and emerging markets, following the crisis of Turkish lira plunging to all-time low against the dollar. Emerging markets across the board remained under severe pressure during the week and Pakistan was also a victim. Investor sentiment revived on Friday as political clarity emerged with Imran Khan elected as the prime minister.

On the economic front, Pakistan’s trade balance was down 16pc month-on-month at $3.2 billion in July. Also, according to State Bank of Pakistan’s latest data, country’s total liquid foreign exchange reserves declined 1.8pc week by $292 million to $16.7bn.

Activity at the local bourse remained slow throughout the week in the absence of triggers. Volume decreased 23pc over the previous week to 161m shares while the value traded stood down by 18pc to $64.3m. Bank of Punjab (52.5m shares), Pak Elektron (34.7m shares), Unity Foods (29.8m shares), Lotte Chemical (28.1m shares) and Worldcall (27.3m shares) came out as the leaders.

Foreign portfolio investors sold equity worth $6.6m during the week against net sale of $38.6m the preceding week. Foreign outflow was noted in commercial banks at $5.9m and cement $2m. On the domestic front, major buying was reported by individuals of equity worth $5.9m and insurance companies $5.5m while mutual funds sold shares of $6.2m.

Sector-wise, negative contributions to the index came from fertilisers, lower by 88 points, commercial banks 86 points, cement 56 points, power generation and distribution 36 points, and automobile assemblers 31 points.

Scrip-wise major losers were Habib Bank, decreasing b 142 points, Engro Corporation 55 points, Dawood Hercules 54 points and Sui Northern Gas 36 points. Positive contributions came from Bank Al Habib, increasing by 39 points and Pakistan State Oil 27 points. NETSOL outperformed market with a gain of 10pc amid its newly announced project of $30m.

The outgoing week saw a flurry of financial results from Engro Corporation and Attock group companies including National Refinery, Attock Refinery, Pakistan Oilfields, Attock Cement and Attock Petroleum.

Market watchers said they expected positive momentum in a two-day trading week due to Eid holidays. Investors are expected to remain upbeat as the new PTI-led government takes charge and the third consecutive democratic era begins. However, some investors may remain cautious as it would also be the rollover week for future contracts.

Major news flow during the outgoing week was foreign exchange reserves slipped below $17bn, Pakistan’s trade deficit widened to $3.19bn, power sector receivables soared to Rs896.36bn, $7.5bn spent on external debt servicing and profit rates on National Savings Schemes were revised.

Published in Dawn, August 19th, 2018