Daily Times

Pakistan Stock Exchange (PSX) edged lower for the first time in 11 weeks, with the benchmark index inching down by 93.61 points (-0.14 percent) on a weekly basis to close at 66,130.02 points.

The minor correction was hailed by market gurus as the benchmark KSE-100 Index gained 4,532.38 points (+7.34 percent) on a week-on-week (WoW) basis in the preceding week, while the index has gained around 24,677 points during the current fiscal year and 25,710 points during the ongoing calendar year. Stocks closed slightly negative during the week under review amid institutional profit-taking after a positive streak of 10 weeks.

However, the KSE All Share Index managed to record gains and closed the week at 44,049.22 points against 43,881.53 points in the preceding week, gaining 167.69 points (+0.38 percent) on a week-on-week basis.

The market failed to keep its bull-run intact despite investor hopes ahead of the International Monetary Fund’s (IMF) board meeting scheduled for upcoming January 11 for loan approval and $100 million increase in the country’s foreign currency reserves. The country also expects to receive $4.5 billion from multilateral and bilateral sources, excluding the IMF, in the current fiscal year, which would help meet its external obligations of $6.8 billion.

During the week, a couple of merger and acquisition deals were announced that sparked hopes among market players while the SBP left its policy rate unchanged in line with market expectations.

According to JS Research, the average daily turnover rose 22 percent week-on-week due to fresh inflows from retail investors and mutual funds, countering intraday corrections. With an average of 630 million shares worth Rs22.48 billion exchanged, the market turnover was high throughout the week. This represented a 9.52pc MoM increase in the number of shares and a 10.54pc MoM decrease in the traded value.

Arif Habib Limited, in its report, noted that the KSE-100 index experienced a roller-coaster ride during the week. Among the highlights was the central bank keeping the policy rate unchanged, which was in line with expectations. Moreover, in Treasury bills’ auction, there was no significant change in cut-off yields across all tenors. Fitch kept Pakistan’s long-term foreign currency issuer default rating unchanged at ‘CCC’, despite favourable economic signs like the strengthening of the rupee and the continuation of a standby arrangement with the IMF, it said. In other notable reports, large-scale manufacturing industries posted a 4.1pc YoY decline during October 2023 (-2% month-on-month). Foreigners’ buying continued increasing to $13.1 million compared to net buying of $9.6 million in the previous week.

The top performing sectors of the week were automobile, transport, and leasing, while the worst performing sectors were leather & tanneries, woollen, and textile weaving. The major net sellers were insurance companies. The top gainers and losers of the week were PTC, BOP, PIBTL, PAEL, and KEL, and HCAR, EFUG, MEBL, GHGL, and NRL, respectively.

According to AKD Research, the outlook for the market remains positive, although the pace of the rally may slow down. The upcoming elections, the robust FDIs, and the active market participation are the key drivers of optimism. The research firm urged the investors to maintain long-term positions in fundamentally sound companies, while taking profits in weak entities. The companies with high dividend yields, especially in the banking, energy, and fertilizer sectors, also offer attractive opportunities for accumulation.