KSE-100 rises in roller coaster week

Mixture of encouraging and dismal developments keeps market volatile

KARACHI:

The Pakistan Stock Exchange endured a roller coaster ride in the outgoing week and the KSE-100 index remained volatile due to a host of positive and negative newsflows. As a result, the stock market shed 170 points, or 0.37%, to close at 46,079 level.

“The week started on a dim note as six new conditions by the International Monetary Fund (IMF) surfaced in its detailed report on Pakistan,” said JS Global analyst Muhammad Waqas Ghani. “However, the market shrugged it off and picked up momentum as companies posted better financial results for the outgoing quarter along with good dividend payouts.” The week kicked off on a negative note as imposition of six new conditions by the global lender struck investor sentiment.

The report, released by IMF, signaled introduction of stringent measures by the government of Pakistan to secure future loan tranches from the apex lender. Market players expect further deterioration of macroeconomic cues on the back of IMF demands. Bourse turned bullish over the next two sessions and amassed nearly 500 points primarily due to announcement of robust financial results which triggered a rally at the stock market. Furthermore, a dip in global oil prices ended fears of spike in imported inflation in the country over the next few months and aided the uptrend. However, a jump in international coal rates capped gains.

Uncertainty in the value of local currency against the US dollar dampened spirits of the market participants on Thursday and the KSE-100 index lost ground. The market staged a rebound in the final session of the week and the index crept up after the approval of revised Textiles and Apparel Policy, 2020-25 by the Economic Coordination Committee rejuvenated investor interest and motivated them to cherry pick stocks. “We expect the market to remain positive in the upcoming week,” stated a report from Arif Habib Limited. “With the continuation of strong result season, certain sectors and scrips are expected to stay under the limelight.”

During the week under review, average daily traded volume fell 28% week-on-week to 207 million shares while average daily traded value fell 16% week-on-week to $46 million. In terms of sector, positive contributions was led by fertilisers (159 points), automobile assembler (55 points), oil and gas exploration companies (40 points), commercial banks (38 points) and power generation and distribution (34 points).

On the flip side, sectors which contributed negatively were technology & communication (66 points), cement (49 points), oil and gas marketing companies (45 points), insurance (36 points) and cable and electrical goods (20 points). Scrip-wise positive contributors were Engro (86 points), Dawood Hercules (61 points), Meezan Bank (59 points), Engro Polymer and Chemicals (34 points) and Fauji Fertiliser Company (33 points). Meanwhile, scrip-wise negative contribution came from PSO (39 points), Adamjee Insurance Company (35 points), Systems Limited (33 points), MCB (21 points) and Pak Elektron (20 points). Foreign selling continued this week, clocking-in at $5.9 million compared to a net sell of $4.4 million last week.

Major selling was witnessed in technology ($3.2 million) and all other sectors ($1.6 million). On the local front, buying was reported by other organisations ($11.1 million) followed by individuals ($3.1 million). Other major news of the week included IMF saying that Pakistan’s external debt would reach $138.568 billion in 2022-23, government seeking a way to reduce withholding tax for Chinese independent power producers, payment to power plants, diammonium phosphate use declining by over 17% in Rabi season, low-cost housing scheme to be introduced.