KARACHI: The tone of the market in the outgoing week was set by the happenings on the political front. Economics for the time being was put on the back burner, though the improving value of the rupee provided some cause to cheer.

After massive volatility, the KSE-100 index settled flat with a tiny loss of 28 points, or 0.06 per cent, at 45,837. The market remained under intense selling pressure as defeat of Finance Minister Dr Abdul Hafeez Shaikh for the hotly contested Senate’s Islamabad seat triggered panic in the market.

After shedding the initial sadness, the prime minister announced that he would present himself before the National Assembly to seek a confidence vote. It brought to a halt the mass exodus as investors who were comforted by the belief that that due to the open ballot system, the prime minister would be able to seek the required number of votes to stay in office. That dispelled the initial fears and both institutional and individual investors on Friday started to re-purchase stocks available at cheap valuations on most sectors across the board that they had dumped a day earlier.

Sector-wise positive contributions came from oil & Gas Exploration Companies (54 points), power (45 points), and oil & gas marketing companies (32 points). Whereas sectors that contributed negatively included cement (85 points), pharmaceuticals (39 points), and textile weaving (16 points). Scrip-wise positive contributors were made by Kapco (42 points), TRG (40 points) and BAFL (39 points) while negative contributions were done by Lucky Cement (45 points), UBL (41 points) and HBL (37 points).

Foreign selling continued this week clocking in at $10.7 million compared to a net buy of $0.3m last week. Selling was witnessed in commercial banks ($10.1m) and technology and communication ($2.2m). On the domestic front, major buying was reported by insurance companies ($8.4m) and banks/DFIs ($8m).

The average daily trading volume arrived at 386m shares (down by 35pc week-on-week) while the average value settled at $129m (down by 19pc); the fall representing weakened sentiments.

A major rally could be expected on upcoming Monday following the success of Prime Minister Imran Khan in seeking vote of confidence from the National Assembly on Saturday. The market sentiments could be further elated by the PM’s instructions to the Mr Hafeez to continue to hold office of the finance minister.

Published in Dawn, March 7th, 2021