KARACHI: Stocks managed to crawl up in the outgoing week, snapping six-week losing streak. The benchmark KSE-100 index recovered 225 points (0.59 per cent) and closed at 38,532.

Investor sentiments were buoyed by positive developments on the macro front which included contraction in current account deficit numbers in February and materialisation of bilateral flows. The finance ministry expected receipt of $2.1bn from China by March 25, which was in addition to granting Pakistan access to its $1bn rice, sugar and yarn industries. Some clarity also seemed to emerge on the IMF bailout as the finance minister expressed government’s willingness to seal the deal by mid of April.

Although the market started on a firm footing with the index recording gains of 545 points, the recovery was almost wiped off in the three successive bearish sessions as investors worried over lack of triggers; scant information on IMF deal and the escalation in the political tensions with the Pakistan Peoples Party threatening to launch a long march to Islamabad.

The average daily traded volume declined 10pc over the earlier week to 84m shares while the value increased by 7pc to $28m reflecting considerable activity in big-cap stocks. Volume leaders were however, the small investors’ favourite sideboard stocks such as PAEL showing trading in 7.6m shares, BOP 7.2m shares, KEL 4.9m shares and TRG 2.9m shares.

However, the overall volume and its value remained low as investors adopted wait-watch strategy in anticipation of further tightening in SBP’s monetary policy due at the end of the month.

Foreign investors emerged as net buyers during the outgoing week accumulating scrips worth $3.1m. Foreign interest was largely concentrated in banks that saw buying of stocks worth $2.9m and oil & gas with net purchases of $1.7m.

On the other side, the cement sector witnessed an outflow of $1.2m. Among local participants, banks with purchases of $2.5m and individuals $2.0m pumped liquidity into the market, while major selling was done by insurance companies of stocks worth $4.8m.

Commercial banks and E&P were the best performing sectors during the week, adding 278 points and 194 points, respectively to the index. E&P stocks rallied on the prime minister’s statement regarding possibility of enormous discovery in offshore drilling, while textiles particularly lower end of the value chain -- spinning and weaving -- garnered investors’ interest on potential Chinese market access. Fertiliser sector also added 75 points.

Negative contributions were made by power generation and distribution (126 points), oil and gas marketing companies (39 points) and pharmaceuticals (30 points).

Scrip-wise major positive contributions came from PPL (115 points), MCB (91 points), HBL (77 points), POL (57 points) and OGDC (51 points). Major laggards included Hubco (122 points), The Searle (30 points) and Mari (29 points).

Going forward, market is expected to trade range-bound as anticipation and predictions on monetary policy due at the end of the week would keep investors on the back foot. Futures roll-over week could also keep market under pressure and so also the concerns over the FATF proceedings. “The upcoming budget would be a key flashpoint for the market,” observed one market watcher.

Published in Dawn, March 24th, 2019