KARACHI: Stocks galvanised 1,400 points (3.4 per cent) in the outgoing week to close at 42,207. Including the preceding week’s gains of 620 points (1.5pc), the benchmark represented a rise of 2,220 points (close to 5pc) in two weeks.

It was by far a great turnaround from weeks of losses before. Massive flow of liquidity; attractive valuations; the optimism in the global markets following the news of introduction of break-through vaccine against Covid-19 within next three months garnered investor interest in equities in the medium term.

As other countries after UK were bracing to put the vaccine on the shelf around the world, the markets took it as a positive sign of revival of global economies. It put back life in capital and commodity markets.

International oil prices edged higher after the Opec+ members decided to stall planned increase in supplies till early next year.

The market put faith in the government’s intention to introduce the Covid-19 vaccine in Pakistan early next year.

The public seemed to take no notice of the spike in the pandemic cases around the world to as high as 680,000 in the second wave that now sweeps the globe. Pakistan also witnessed rising cases to over 3,000 a day with the country’s total positive cases crossing 51,000 mark, up 10pc week-on-week and the infection ratio reaching above 7pc.

The investors also ignored the potential measures to revitalise the International Monetary Fund programme and brushed aside the protest rallies by the opposition and on occasions by the government with huge crowds filling the space that completely disregarded the standard operating procedures.

On the positive side, some economic indicators started to show signs of improvement. The CPI inflation number for November clocked in at 8.3pc, which came in at lower than 8.91pc in October and the average monthly CPI in 2020.

Increase in exports and remittances provided further encouragement to the investors. Cement and steel industries passed on some of the cost increase to consumers through the price rise in products which saw investors leap for mainly the steel stocks during the week.

Foreign investors continued to offload positions with the weekly sell-off amounting to $30 million.

Foreign corporates mainly sold Pakistani stocks worth $36.06m which was absorbed by local participants.

Among domestic players, individuals bought shares worth $20.79m followed by brokers $8.07m; insurance companies $7.79m and mutual funds $5.37m.

New investors arrived in droves at the market hoping to make money while the going at the market was good.

Average daily traded volumes shot up to 440m shares, up 55pc week-on-week while the daily average traded value also surged 66pc to $113m. Sector-wise, positive performers were engineering; refinery; technology & communications and automobile assemblers.

Scrip-wise the major gainers included TRG, Intern­ational Industries, Pak Suzuki Motors; Attock Refinery and Al-Ghazi Tractors.

Going forward, market participants looked forward to the stock trend with cautious optimism.

While the index sitting top of the 42,000 points provided a hint that some sectors may be over-sold, the overall investors outlook was of more room in some sectors. The stable value of the rupee and the hopes of early arrival of Covid-19 vaccine kept sentiments upbeat.

Some looked forward to a rally in the oil stocks — exploration & productions and oil marketing companies, as they had under performed the market in recent weeks. There was also optimism in improved numbers in the upcoming quarterly results announcement season.

Published in Dawn, December 6th, 2020