KARACHI: Stocks gained momentum after an early choppy start to the outgoing week, resulting in sizeable gains in the KSE-100 index by 962 points (up by three per cent) week-on-week, closing above the 33,000-level at 33,033.

Several factors rekindled investors’ interest in the equities including the increase in cement prices in Northern region and a rise of 12.4pc in local despatches, which was taken as a signal of the revival of construction sector that has been bearing the brunt as cyclical for long time. Moreover, 1QFY19 tax collection was reported at 90pc of the International Monetary Fund target.

But the major factor that helped investors take heart and be encouraged was the meeting of leading industrialists and businessmen with the Army Chief Qamar Javed Bajwa who lent his ears to their grievances and agreed to assist in finding ways to bolster the economy.

Such was the euphoria created by the meeting that investors went into heavy buying overlooking all the negatives. Stronger than expected inflation reading (11.37pc against consensus expectation of 11.1pc); the central bank’s foreign exchange reserves falling to a three-month low of $7.7bn; concerns over the upcoming Financial Action Task Force and the political headwinds on the announcement of long march to Islamabad starting on 27th by a major political party could not spoil the mood of investors.

Participation also increased significantly with average daily traded volume up 106.4pc over the earlier week to 223 million shares while average value traded clocked in at $40mn (higher by 58pc).

Foreign selling continued in the outgoing week at $4.7m compared to a net sell of $8.8m the earlier week. Their sell-off was witnessed in commercial banks at $4.6m and food and personal care $1.7m. On the domestic front, major buying was reported by other organisations $4.9m and individuals $4.4m.

Sector-wise positive contributions came from commercial banks at 231 points, cements 189 points, power generation and distribution 96 points, oil and gas marketing 93 points and fertiliser 68 points. Scrip-wise major gainers were Habib Bank, up 5.38pc, Hub Power 3.46pc, Engro Corporation 2.77pc, National Bank 15.50pc and DG Khan Cement 21.87pc.

Going forward, market gurus expect a quiet week ahead with some cooling as investor interest would turn to the upcoming results season where cyclical sectors would be interesting to watch. Major developments next week include Prime Minister Khan’s visit to China aimed at reviving China-Pakistan Economic Corridor projects and removing impediments. Besides, the upcoming FATF meeting (scheduled on October 16-18) holds key to market performance where a favourable outcome would set the tone for significant market performance in medium term.

Published in Dawn, October 6th, 2019