KARACHI: Stocks remained bearish for the second successive week as investors harnessed risk-off sentiments due to the growing political noise where JUI (F) was determined to hold Azadi march on 27th and rally to Islamabad on 31st, with other major political parties also agreeing to join.

After an early week plunge by 2.3 per cent, the KSE-100 index limped back to retrieve the losses in succeeding sessions before finally closing with a loss of 213 points (0.63pc) at 33,657.

Besides political events, the tensions on the eastern border, the market’s concerns over the ability to comply with the Financial Action Task Force recommendations in the next four months in order to stave off the black list and the roll over week also kept investors on the sidelines.

The precarious health of the former convicted prime minister remained in focus in the last three days, which eclipsed some of the positive developments on the economic side such as the narrowing current account deficit, Pakistan’s steep climb to the World Bank Ease of Doing Business Index to 108th place, from 136th and the yield on short tenor government paper coming off.

Financial results from cyclicals released during the week were poorer than expected with automobile and cement companies posting higher than expected losses.

Refreshingly, net foreign buying was witnessed clocking in at $2.8 million compared to net sale of $2.1m. Foreign inflows were witnessed in cement at $2m and fertiliser $1.2m. On the domestic front, major selling was reported by individuals $3.1m and companies $2.2m.

Average daily volume shrank 11pc to 125m shares, while average value traded came in at $25m, down 17pc. The decline was attributed by some traders to the application of minimum standard commission.

Sector-wise negative contributions came from commercial banks, decreasing by 108 points, cement 104 points, and power generation and distribution 76 points while gains were led by oil and gas exploration, rising 118 points, food and personal care products 47 points and fertiliser 30 points.

Among scrips, major laggards were Lucky Cement, down 58 points, Bank Al Habib 44 points, Hub Power 42 points, Pakistan Services Ltd 35 points and Habib Bank 35 points.

Going forward, pundits expect the market to remain range-bound as the political events would keep risk-averse investors on the sidelines. On the other hand, earnings season is in full bloom, where major corporates such as Fauji Fertiliser, GlaxoSmithKline, Kot Addu Power, Searle Company, Indus Motors, National Bank, Nishat Chunian, Nishat Mills, Cherat Cement, Gul Ahmed, Fatima Fertiliser, Pakistan State Oil, Pakistan Petroleum, Amreli Steels, Hub Power and Lucky scheduled to announce their results.

Any company with good profit and payout may attract long-term investors. The upcoming International Monetary Fund programme review would also leave an impact on the market as the mission is scheduled to arrive on 28th.

Published in Dawn, October 27th, 2019