KARACHI: The stock market remained range-bound in the outgoing week owing to many political and economic developments.
Arif Habib Ltd said the transfer of power from an elected government to an interim caretaker setup played a role in keeping the index movement within a short range.
Additionally, the market sentiment was adversely affected by an increase in petrol and diesel prices of Rs17.50 and Rs20 a litre, respectively.
On the economic front, the fiscal-year deficit was recorded at Rs6.5 trillion or 7.7 per cent of GDP. In addition, as of June 2023, the central government debt increased to Rs60.8tr, up 3.3pc from a month ago. Foreign exchange reserves of the State Bank of Pakistan increased by $12 million to hit $8.1bn.
The rupee depreciated during the outgoing week against the dollar to close at 295.78, down 2.46pc week-on-week.
As a result, the stock market’s benchmark index closed at 48,218 points after declining by 206 points or 0.4pc from a week ago.
Sector-wise, negative contributions came from commercial banking (159 points), fertiliser (122 points), cement (63 points), chemicals (38 points) and exploration and production (37 points).
Meanwhile, sectors that contributed positively were technology (194 points) and textile composite (20 points).
Scrip-wise, negative contributors were Engro Corporation Ltd (118 points), Oil and Gas Development Company Ltd (77 points), MCB Bank Ltd (65 points), Meezan Bank Ltd (30 points) and Habib Bank Ltd (22 points).
Meanwhile, scrip-wise positive contributions came from Systems Ltd (194 points), Pakistan Petroleum Ltd (62 points), Nestle Pakistan Ltd (28 points), Thal Ltd (17 points) and Interloop Ltd (17 points).
Foreign clocked in at $2.38m versus a net purchase of $2.92m a week ago. Major buying was witnessed in technology ($1.45m) and exploration and production ($0.72m). On the local front, selling was reported by banks ($3.9m) and mutual funds ($1.62mn).
The average daily volume arrived at 232m shares, down 32.6pc week-on-week. The average daily value traded settled at $32m, down 36pc from a week ago.
According to AKD Securities, the stock market is likely to maintain its positive trajectory next week owing to a peaceful transfer of power to the caretaker setup. However, due to the strict conditions imposed by the International Monetary Fund with regard to fiscal discipline and upcoming general elections, market performance may remain volatile with some cushion coming from bilateral/multilateral inflow commitments and elevated reserves’ level.
“We reiterate our stance of following a cautious approach to stock picking and continue to advocate dollar-denominated revenue stream scrips,” it added.
Published in Dawn, August 20th, 2023
