Stocks end negative in lacklustre trading
The Pakistan Stock Exchange (PSX) ended the week on a negative note as the benchmark KSE-100 index lost 286 points to settle at 41,344.01 with many investors remaining on the sidelines.
The KSE-100 index commenced the week under pressure due to mounting inflation and closed in the red zone.
The week started on a bearish note as fresh depreciation of the rupee against the US dollar dented the already pessimistic sentiment due to the delay in resumption of the International Monetary Fund (IMF) bailout programme.
However, value buying lifted the KSE-100 index after a lacklustre trading session on concerns about the expected rate hike amid monetary policy announcement.
However, the KSE-100 index failed to close the week in the green as the market settled at 41,344 points, down 286 points (or 0.7%) week-on-week.
Volumes remained low throughout the week in the absence of positive triggers with investors remaining on
the sidelines.
Pakistan equities closed the week on a negative note at 41,344, reporting a decline of 0.7% week-on-week, said JS Global analyst Faisal Irfan.
The volumes remained dry with average 90 million shares traded per day during the week, witnessing a decline of 55% on a week-on-week basis.
Key underperformers during the week were refinery, engineering and
fertiliser sectors.
Investors remained on the sidelines owing to the lack of any positive triggers and further delays in the IMF staff-level agreement, said the analyst.
Moreover, the CPI for June touched a 13-year high of 21.32% year-on-year against market expectation of around 18% year-on-year.
Along with that, the trade deficit for June 2022 touched a five-month high of $4.85b, up 34% year-on-year and 20% month-on-month, taking the FY22 trade deficit to $48.35b, up 55% year-on-year.
On the international front, oil prices took a major correction, with Brent declining by 12% week-on-week to close at $100 per barrel as fears regarding demand slowdown due to the risk of recession crept in.
On the news front, the Petroleum Division reportedly proposed a hike in gas price in the range of 42% to 82% for various segments of the industry.
Arif Habib Limited, in its report, said that the market commenced on a negative note this week, amid concerns over the resumption of the IMF programme.
Moreover, the Pakistani rupee climbed up by Rs3.06 against the US dollar, closing the week at Rs207.91.
In addition to this, the cement offtake registered a decline of 7.9% year-on-year during FY22. MS and HSD sales during June 2022 witnessed a drop of 12% and 16% month-on-month, respectively.
Meanwhile, the reduction in Arab Light price by 4% provided some respite to the investors and cushioned the overall dip.
The market closed at 41,344 points, losing 286 points (down by 0.7%) week-on-week.
In terms of sectors, positive contribution came from technology and communication (27 points), oil and gas marketing companies (18 points), oil and gas exploration companies (13 points), close-end mutual funds (4 points) and Real Estate Investment Trust (3 points).
On the flip side, the sectors which contributed negatively included Cement (97 points), Fertiliser (57 points), Commercial Banks (30 points), Chemical (27 points) and Power Generation and Distribution (24 points).
Meanwhile, stock-wise positive contributors were Oil and Gas Development Company (39 points), Pakistan Petroleum (27 points), TRG Pakistan (15 points), Sui Northern Gas Pipelines (14 points) and Habib Bank (13 points).
However, negative contribution came from Lucky Cement (49 points), Pakistan Oilfields (39 points), Engro Polymer and Chemicals (34 points), Bank AL Habib (33 points) and Engro Corporation
(33 points).
Foreign buying was witnessed this week, clocking in at $1.63m compared to a net buy of $1.52m last week.
Major buying was witnessed in all other sectors ($0.63m) and technology ($0.56m).
On the local front, selling was reported by mutual funds ($2.91m) followed by banks ($2.20m).
Average volumes clocked in at 90m shares (down by 55% WoW) while average value traded settled at $15m (down by 52% WoW).
Other major news included SBP extends deadline for implementing IFRS-9 to January 1, 2023, Bank advances to private sector swell by 142pc, Rs9.42/unit tariff hike approved for KE and Urea Sales Rise by Massive 73% month-on-month.
Published in The Express Tribune, July 9th, 2022.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.