Bullish week on PSX

Published September 8, 2019
After  a volatile trade, the stocks closed the week on a positive note  underpinned by encouraging news flow that convinced investors in varying  degrees. The KSE-100 index gained 795 points (2.68 per cent) week-on-week and  settled at 30,467 points. — AFP/File
After a volatile trade, the stocks closed the week on a positive note underpinned by encouraging news flow that convinced investors in varying degrees. The KSE-100 index gained 795 points (2.68 per cent) week-on-week and settled at 30,467 points. — AFP/File

KARACHI: After a volatile trade, the stocks closed the week on a positive note underpinned by encouraging news flow that convinced investors in varying degrees. The KSE-100 index gained 795 points (2.68 per cent) week-on-week and settled at 30,467 points.

The rally was built on the SECP’s major reforms announced at the preceding weekend to rejuvenate the capital market and promote ease of doing business. Moreover, the change in CPI methodology revealed a lower than anticipated reading at 10.49pc for August which the market hoped raised the likelihood of a policy rate cut. There was not much improvement in the rupee-dollar parity, price of gold and fixed income returns from banks and national savings schemes, that could suck out liquidity from the market.

The third trading session also witnessed withdrawal of presidential ordinance which was signed to waive off 50pc of outstanding GIDC overdue from the CNG, power, fertiliser and industrial gas consumers.

Moreover, the prime minister’s meeting with businessmen to facilitate economic activity also emboldened investors. Although at the close of trading on the last day, there were reports of an IMF mission on its way to Pakistan to take stock of the financial indicators, the government explained that there was no reason to be alarmed as it was a routine visit.

Finally, the SBP’s foreign exchange reserves increased for third week in a row (though by a minor sum), which was a relief, considering downwards movement for weeks on end.

Foreign investors ditched stocks worth $5.32m in the outgoing week (four days) compared to net buying of $0.97m the preceding week. Major foreign selling was witnessed in commercial banks amounting to $3.05m, cements $2.44m and oil and gas $2.4m.

On the local front, buying was reported by Individuals of stocks worth $6.15m followed by other organisations $4.10m.

Average daily turnover in the outgoing week declined 24.9pc week-on-week to 93m share while average traded value decreased 23pc to $23.3m. Scrips that led the volumes included MLCF (7.17m shares), WTL (4.58m shares), OGDC (4.22m shares), DGKC (2.66m shares) and PAEL (2.64m shares).

SThe major issue that could determine the direction of the market going forward is the definitive decisions by FATF in its meetings on Sept 9-10 in Bangkok to discuss Pakistan’s progress to control terror financing.

It would determine whether the country remains on the greylist or is blacklisted. The IMF staff is also scheduled to visit Pakistan on Sept 17. Based on lower inflationary figures for August, optimists expect rate cut by the State Bank of Pakistan. The Monetary Policy Statement is due in the last week of this month.

Published in Dawn, September 8th, 2019

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