KARACHI: The shortened two-day outgoing week saw the market listless as investors displayed little interest in taking fresh positions. The KSE-100 index clawed up by 142 points (0.33 per cent) to close at 42,588.29.

The first trading day of the week ended on a bearish note where bourse lost 21.52 points while Friday’s trading wrapped up the week with a gain of 163.19 points.

Investors took heart from the smooth transition of power as elections were held for various leading posts in the parliament. In the midst of Eid holidays, the market participants also decided to remain on the sidelines awaiting the new government to lay out the road map to tackle twin deficits and declining foreign exchange reserves.

Prime Minister Imran Khan’s inaugural address on Aug 19 had provided the broad contours of his government’s policies. Moreover, positive news flow on possibility of foreign aid/loans from regional allies including China and Saudi Arabia also appeared during the week, citing unconfirmed sources.

The average traded volume during the week dropped 21pc over the previous week to 116 million shares while the average traded value dipped 30pc to $37m. Mid-cap stocks caught interest of day traders and small investors. Worldcall took the lead with 36.87m shares, followed by Bank of Punjab at 15.9m shares, Unity Foods 14.4 m shares and Engro Polymer 10.4m shares.

Foreigners continued to remain net sellers with an outflow of $3.45m with overseas corporates in the lead. Foreign outflow was noted mainly in the cement and exploration and production sectors. Amongst local investors, insurance and mutual funds provided support to the market amid thin volume, with a cumulative liquidity of $5.62m. On the flip side, companies, banks sold stocks worth $3.02m.

For the outgoing week, the main contribution to the KSE-100 upside of 141.67 points came from Fauji Fertiliser, up 1.90pc, Pakistan Tobacco 4.13pc and Lucky Cement 1.29pc, adding 72 points. On the flip side, Pakistan Service Ltd, down 5.48pc, took away 28 points.

Moody’s comments on Pakistan appeared during trading hours on Friday concerning the country’s vulnerability to dollar appreciation with debt affordability to weaken significantly. However, it did not cause significant damage to the investor sentiments.

On the macro front, the country’s current account deficit widened by 16.4pc during July as compared to the corresponding period of last year. Moreover, Pakistan is to pay $9.3bn in external debt servicing. Foreign direct investment in the country also recorded a decline of 45pc during July to $128.1m.

Going forward, market participants are expected to enter for trading but the movement would be marked by caution on account of the futures rollover. Market strategists said that investors were likely to keenly track developments on the resolution of major economic headwinds. They would watch for the government efforts at replenishing the depleting foreign exchange reserves and tackling the current account and fiscal deficits.

The last leg of the results season would see financial figures unveiled by Fauji Cement, Fatima Fertiliser, National Bank, Meezan Bank, Bank Alfalah and Mari Petroleum. Any positive surprise in earnings and dividend payouts could trigger an upward momentum.

Published in Dawn, August 26th, 2018