KARACHI: The benchmark index of the Pakistan Stock Exchange (PSX) gained 641 points in the outgoing week to close at 46,219 points, up 1.41 per cent on a week-on-week basis.

According to AKD Securities, the stock market remained jittery in the first two sessions as it shed 351 points owing to the uncertainty over the ongoing review of the International Monetary Fund (IMF).

In the third session, however, the stock market rebounded strongly and added 564 points on the news of $3 billion expected inflows from Saudi Arabia. It instilled confidence among investors as they became bullish. One consequence of that news was the appreciation in the value of the local currency against the dollar. The rupee gained 1.4pc against the greenback in the intraday session to close at Rs172.6.

In addition, the IMF allowed Pakistan to utilise $2.78bn for meeting budgetary-side requirements that the fund had extended to Pakistan for combating Covid-19. This further fuelled the positive momentum on the exchange.

However, the average weekly volume remained 305.96 million shares, down 10.5pc from 341.8m shares a week ago. The brokerage house said the drop in volume was because of the inefficiencies in the newly implemented trading system at the PSX.

Other important events that happened during the week included Pakistan and Japan agreeing to defer debt payments of $200m, urea off-take jumping 24pc year-on-year in September, Qatar deciding to invest in Pakistan’s upcoming LNG terminal, the Power Division seeking a Rs134.8bn technical supplementary grant to clear the dues of independent power producers and the fiscal deficit for July-August standing at 0.9pc of GDP.

Top performers during the outgoing week were Packages Ltd, which went up 14.6pc week-on-week, followed by Shifa International Hospitals Ltd (12.5pc), Pioneer Cement Ltd (10.8pc), International Steels Ltd (10.6pc) and International Industries Ltd (10.4pc).

Flow-wise, “other organisations” remained major buyers as they posted a net purchase of $1.7m. They were followed by insurance companies with a net buy of $1.32m. Foreigners stood on the other side with a net sale of $2.68m, followed by individuals who offloaded shares worth $1.05m.

According to Arif Habib Ltd, the stock market is likely to show positivity in the upcoming week, thanks to the conclusion of talks with the IMF for the sixth tranche. Moreover, support from Saudi Arabia in terms of safe deposits and the upcoming sukuk issue alongside the suspension of debt repayment will reduce pressure from the country’s foreign exchange reserves.

“However, current macro-economic concerns like rising imports and higher inflation can keep the market range-bound,” it added.

Published in Dawn, October 31st, 2021