Budget passage lifts sentiments on PSX

Published July 4, 2021
In the earlier part of the week, equities remained under pressure as financial institutions took profit for ‘’window dressing’’ at the close of their financial year on June 30. — AFP/File
In the earlier part of the week, equities remained under pressure as financial institutions took profit for ‘’window dressing’’ at the close of their financial year on June 30. — AFP/File

KARACHI: Stocks remai­ned volatile in the outgoing week. The KSE-100 index was slightly up by 83 points, or 0.2 per cent, to close at 47,686. The proceedings during the week was the story of two halves.

In the earlier part of the week, equities remained under pressure as financial institutions took profit for ‘’window dressing’’ at the close of their financial year on June 30. In the later part of the year, the passage of the Finance Bill 2021 in the National Assembly offered consolation to institutional and individual investors who began fresh new-year buying. During the week, the index moved range-bound between the high and low of 48,080 and 46,900 points.

The likely reclassification of Pakistan into Frontier Market (FM) from Emerging Market (EM) by MSCI and the FATF deciding to keep Pakistan on the grey list, hit the index which recorded heavy falls early in the week, but National Assembly passing the budget with majority vote, below-expected inflation reading for June at 9.7pc against street estimates of 10.1pc and exports hitting an all-time high of $25.3bn in FY21 triggered buying in the last days of the weekly trading.

Also reports of over $1.5bn record receipts in Roshan Digital Account supported the market which enabled index to conclude the week with slight gains. Average daily trading volume stood down by 10pc over the previous week to at 622m shares while average the traded value fell 4pc at $107m.

Analysts at Arif Habib Ltd calculated that sector-wise positive contributions came from technology (105 points), pharmaceutical (68 points), food and personal care (51 points), tobacco (22 points), and insurance (14 points).

Going forward gurus expect market to maintain the upward trajectory on the basis of improving macroeconomic fundamentals and the comfortable passage of the Finance Bill 2021.

Covid situation will remain fluid as the infection cases have started to spike and authorities warn of worsening situation post-Eid holidays. The investors would, however, be occupied with upcoming results as the financial season commences.

Analysts expect cement and steel sectors to produce brighter bottomline on strong demand and historic high PSDP allocation for Naya Pakistan Housing Scheme. However, increased raw material costs, basically coal could throw spanner in the works.

Major announcement that could affect the market in the upcoming week would be the auction result for fixed-rate PIBs from which the government plans to raise Rs125bn.

Published in Dawn, July 4th, 2021

Opinion

Danger lurks
27 Sep 2021

Danger lurks

The colonial mindset continues to percolate.
Dance of death
Updated 27 Sep 2021

Dance of death

India is happily flirting with extermination.
Climate of change
Updated 26 Sep 2021

Climate of change

The world faces a climate emergency as the toll on people’s lives and livelihoods keeps growing.

Editorial

Phasing out coal
Updated 27 Sep 2021

Phasing out coal

Move affords Pakistan an opportunity to renegotiate its deals with Beijing to convert them into cheaper, clean energy projects.
27 Sep 2021

Poor online score

A RECENT report by Freedom House, the US-based watchdog that assesses democratic trends around the world, has placed...
27 Sep 2021

Child’s mental capacity

CONVERTING to another faith is one of the most consequential decisions an individual can make in their lifetime. It...
Updated 26 Sep 2021

Intransigent Taliban

PRIME MINISTER Imran Khan has delivered an effective speech at the UN General Assembly session detailing the salient...
26 Sep 2021

Deadly misinformation

THE distinction between ‘fake’ and ‘authentic’ news is now a concept impossible to escape. In an...
26 Sep 2021

Covid arrests

THE unilateral decision taken by Karachi’s East Zone police to arrest citizens without Covid vaccination cards ...