KARACHI: Stocks extended the losing streak for fifth consecutive week with the KSE-100 index sinking by another 589 points (1.5 per cent) to settle below the 39,000-level at 38,950.

The spillover effect of the preceding week’s India-Pakistan confrontation kept investors off the market for most part, evident in the anaemic volumes. Investors were also concerned over the sector-specific impact of economic reforms package. Approval of Second Supplementary Bill, 2019 by the National Assembly was a major event during the week where relief for the local auto manufacturers remained the key highlight.

The week started with the much-awaited disbursement of Rs200 billion (raised through Sukuk issuance) for partial resolution of the circular debt issue, though it could scarcely make an effect on the oil marketing companies and independent power producers. On last day, the market received the impact of heavy sell-off in regional markets due to worsening global growth.

On the local political front, there were ripples created by the ill-health of former prime minister while the government announced seizure of all assets linked to organisations banned by the United Nations Security Council and detained individuals with links to them in an attempt to avoid an adverse decision by the Financial Action Task Force.

Foreigners remained net sellers of shares worth $3.5 million, taking total net investment inflow to $42.6m in current year to date basis. Major selling was witnessed in oil and gas at $2.8m and banks $2.6m. Among local investors, individuals and companies emerged as buyers with net purchases worth $5.1m and $3.5m, respectively while mutual funds booked profit by selling stocks valued at $10.6m.

The average daily traded volume shrank 29pc to 114m shares while the average traded value declined 35pc to $33m. Sector-wise, the worst performers were exploration and production and commercial banks as they chipped away 357 points, cumulatively. The banking sector remained under pressure due to the super tax clause in the economic reforms package. On the positive side, due to the removal of law barring non-tax filers from purchasing cars, auto assemblers outperformed other sectors, making positive contribution of 91 points.

Scrip-wise, major downside came from Oil and Gas Development Company, declining by 5.33pc, Pakistan Petroleum 4.25pc and MCB 4.66pc, taking away 288 points. Other laggards were Hub Power and Engro Corporation.

Going forward market gurus see a range-bound week with thin volume until clarity emerges on the economic situation. With the results season coming to a close, investors would be focused on the progress on IMF package which would be the key trigger. Geopolitical situation would also keep investors cautious until the dust settles down. Until strong positive triggers appear, investors could opt to go long and focus on value buying.

Published in Dawn, March 10th, 2019