PSX rebounds after a volatile week

Published February 21, 2021
The stock market bounced back in the outgoing week with the KSE-100 Index reclaiming 419 points or 0.92 per cent to close at 46,228. — AFP/File
The stock market bounced back in the outgoing week with the KSE-100 Index reclaiming 419 points or 0.92 per cent to close at 46,228. — AFP/File

KARACHI: The stock market bounced back in the outgoing week with the KSE-100 Index reclaiming 419 points or 0.92 per cent to close at 46,228.

Trading was volatile throughout the week with the index finishing in green in two of the five sessions. The week started on a positive note as investors continued to be encouraged by the results of staff-level agreement with the IMF which would fetch funds in the sum of $500m under the Extended Fund Facility. Other than that, things on the home and international front remained largely positive. The scaling down in Covid-19 cases and related deaths together with encouraging news on acquisition and distribution of the vaccine raised hopes of growth in the economy.

The unsettling matter on the investors’ mind was the upcoming Financial Action Task Force (FATF) review scheduled to begin from early next week.

The global markets and international oil prices remained mixed during the week. The E&P sector briefly came under the limelight owing to early week increase in the international oil prices. Reports of rise in remittances by 19pc year-on-year for January also helped improve investor sentiments. However, the index at 47,000 points level continued to give tough resistance.

Selling by foreign investors slowed down during the week to $0.6 million against net sale of equities worth $3.2m the preceding week. Outflow was witnessed mainly from Commercial Banks of shares valued at $5.1m and Technology and Communication $1.4m.

On the domestic front, major buying was reported by companies of shares worth $5.5m and individuals $4.9m. Average daily traded volumes came to 595m shares, representing decline from 19pc the week before.

Pundits visualise the market to continue to perform strongly in the upcoming week on the hopes that the economic activity would receive a boost following progress on the Covid-19 vaccination.

The major event in the week would be the FATF’s review of Pakistan’s progress on the Action Plan (meetings between Feb 22-25. A decision to remove Pakistan from the grey list would be a major trigger. Pak rupee is thought to remain stable against the dollar on continuing inflow of remittances.

One of the major factor that would have greatest influence on the investor sentiments is the quality of the upcoming corporate results. Some big companies including the OGDCL, UBL, NBP, PPL, NML, Indus Motor, Hub Power Co and Maple Leaf Cement are set to unveil financial figures.

Published in Dawn, February 21st, 2021

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