Stocks lose 562 points in jittery rupee week

Published September 19, 2021
Investors watch prices at the Karachi Stock Exchange. — AFP/File
Investors watch prices at the Karachi Stock Exchange. — AFP/File

KARACHI: The stock market remained range-bound in the outgoing week with the KSE-100 index recording a fall of 562 points, or 1.19 per cent, to close at 46,636.

Investors mostly re­­mained in a blackened mood as there was scarcely anything to show by way of a positive development. The debilitating pressure on the rupee that ditched it to an all-time low of Rs169.1 against the dollar, was the major factor that disillusioned investors.

Moreover, higher coal prices continued to put pressure on cost of production of cement, while higher oil prices raised concerns over future import bill. Temporary suspension of gas supply to general industries, and mounting international commodity prices also kept investors on their toes.

By the end of the week, things began to look a bit better with some recovery in the rupee parity due to an apparent SBP’s intervention and restoration of gas supply to general industries. The slowdown in Covid-19 cases which resulted in relaxation in restrictions in Sindh also helped to improve investor sentiments.

The dramatic events on the last trading day which saw the index in massive volatility by over 600 points could have provided perfect opportunity for some major investors to buy at dips and sell at highs. One of the reason for the index to take a dip in the second half on Friday was stated to be the New Zealand’s eleventh hour decision to call of cricket match with Pakistan, citing security concerns.

Foreign investors continued their sell-off of stocks worth of $10.9m, though lower than the preceding week’s selling of $18.6m. Major outflow was witnessed from commercial banks amounting to $12.7m and all other sectors $2.2m.

On the local front, buying was reported by individuals of shares worth $16.8m followed by banks/DFI $7.3m and insurance companies $0.9m. Average daily volume clocked in at 400m shares down by 7pc week-on-week while average value traded settled at $90m, up by 3pc.

Going forward, the week would start with the announcement of SBP monetary policy on Monday. Except some lone voices of a hike between 20 to 25bps, the market consensus re­­mains of no change in MPS.

Positivity is likely to creep in the market on improved sentiments attributable to talks with the IMF for the sixth tranche to start at the end of the current month. Market gurus opined that the slowdown in global oil prices would relieve pressure off the external account.

However, current macroeconomic concerns such as rising imports, higher inflation due to increasing petroleum prices and pressure on currency could deteriorate investors’ sentiment. Other than that the decline in infection ratio of Covid cases in Pakistan is a good omen that could provide encouragement to investors to trade.

Published in Dawn, September 19th, 2021

Opinion

Intolerance grows
Updated 18 Oct 2021

Intolerance grows

Failure to pass the bill undermines the writ of the state, highlights its inability to guarantee citizens’ protection and freedom.
Moral panic
Updated 18 Oct 2021

Moral panic

If conflation of culture with religion is taken as true, there is mounting evidence that society has gone closer to such roots.
Challenges amid discord
Updated 18 Oct 2021

Challenges amid discord

Institutional disharmony and polarised politics are impeding efforts to address the country’s challenges.
Climate & youth
Updated 17 Oct 2021

Climate & youth

Disillusionment and anxiety are on the rise among youth as they confront the diminishing prospects of a better tomorrow.

Editorial

Financial troubles
Updated 18 Oct 2021

Financial troubles

Growing trade gap is fuelling the current account deficit and bringing the already meagre foreign exchange reserves under stress.
18 Oct 2021

Complaint portal

IN a ruling on Thursday, the Mingora bench of the Peshawar High Court held that the Prime Minister’s Performance...
18 Oct 2021

Capital’s master plan

IT is encouraging that on Thursday, the restructured commission formed by the federal cabinet to revise ...
Carnage in Kandahar
Updated 17 Oct 2021

Carnage in Kandahar

Pakistan’s anti-extremism policy is in many ways half-baked and inconsistent.
17 Oct 2021

Sanctity of contracts

PAKISTAN is facing yet another international dispute before the International Centre for Settlement of Investment...
17 Oct 2021

New sports policy

THIS week, the Pakistan Football Federation Normalisation Committee chief Haroon Malik was in Zurich to hold ...