KARACHI: Stock trading remained choppy for most of the sessions in the outgoing week as the KSE-100 index oscillated between the red and green, following the news flow. It closed on a flat note with a minor decline of 39 points (0.09 per cent) at 43,168.

In the early part of the week, investors resorted to profit-taking as domestic political developments gripped sentiments. The coalition partners of PTI expressed their dissatisfaction with the government which was feared to disturb the wafer-thin majority of the centre. Moreover, concerns over rising inflation kept participants’ optimism under check.

However, positives on macro front included Fitch affirming Pakistan at ‘B-’ with stable outlook and a massive increase in foreign direct investment by 68.3pc in Jul-Dec’19 provided some support to the index.

Moreover, on Friday, foreign investment in T-bills recorded largest single day inflow of $536.1 million, taking their total stakes in treasury and Pakistan Investment Bonds to $2.26 billion in fiscal year-to-date which bodes well for the exchange reserves and cushioned the index dip.

Based on the National Clearing Company data, foreigners were net buyers of $2.81m. On the local side, banks were net buyers of $2.3m and Mutual Funds were net seller of $1.7m.

Foreign buying continued at $2.8m compared to net buy of $7m the preceding week. Their inflows were witnessed in sectors like exploration and production $1.4m and fertiliser $1.3m. On the domestic front, major selling was reported by insurance companies in the sum of $2.8m, followed by individuals offloading stocks worth $2.2m and mutual funds selling $1.7m.

Banks were net buyers of stocks valued at net $2.3m. Average daily volume settled at 246m shares, down 19pc while mean value traded came in at $49m, representing decline of 38pc.

Sector-wise positive contributions came from commercial banks, automobile parts and accessories assembler refinery and textile weaving. On the other hand, decliners were oil and gas exploration companies, decreasing by 96 points and power generation and distribution 55 points.

Among scrips, gains were witnessed in Meezan Bank, rising by 4.36pc, Habib Bank 1.02pc, Thal Ltd 9.73pc, Byco Petroleum 24.68pc and Habib Metro 4.30pc. Those were offset by decline in Oil and Gas Development Company by 2.57pc, Hub Power 2.06pc, Dawood Hercules 3.08pc, Pakistan Oilfields 2.25pc and Colgate-Palmolive Pakistan 8.65pc.

Other major news flow included Hyundai-Nishat starting truck production, government approval of 121 gas schemes, the SECP to relax major condition under IPO regulations, international tender floated for auction for 18 new exploration and production blocks.

In the upcoming week, seasoned players expect the market to be positive as sentiments should reflect improvement in SBP’s foreign exchange reserves and stable rupee-dollar parity amid heavy inflows in T-bills and narrowing current account deficit. The start of the results season would keep market sideways depending on the announcements by big corporate in key sectors.

Published in Dawn, January 19th, 2020