Daily Times

Pakistan Stock Exchange (PSX) succumbed to selling pressure amid profit-taking on the last trading day of the week, as benchmark Kse-100 lost 223.94 points by the closing bell, and clocked at 40,807.09 index level.

On Friday, the index snapped three day rally, and traded in the negative territory right from the opening bell. Profit taking was witnessed in Exploration &Production and cement stocks after active buying was witnessed earlier in the week.

During the week, Pakistan Equities bounced back with the index climbing 620 points as the market participants gained much-needed clarity related to lockdown measures taken by the government to curb the virus. Additionally, although in line the brief rally was witnessed in the cement stocks following official data revealed by Pakistan Bureau of Statistics (PBS), according to which export of cement witnessed an increase of 11.79 per cent during the first four months (July-Oct) of the current financial year (FY21) as compared to the corresponding period of last year. According to the details, Pakistan exported cement worth $150.544 million in July-Oct FY21 as compared to the exports of $94.409 million in July-Oct FY20.

Moreover, market sentiments were also buoyed by Central bank’s Monetary Policy Committee (MPC) decision to keep the policy rate unchanged i.e. at 7 percent, and the update on the resumption of the International Monterey Fund (IMF) program leasing a new ray of hope among the investors. State Bank of Pakistan’s (SBP) governor Raza Baaqir indicated that the technical discussions with the IMF are ongoing, and major progress has been made on key sticking points such as electricity tariffs, taxation, etc.; the timing of the same remains a key sticking point.

The index rally was also supported by interest in E&P sector, after global oil price hit an 8-month peak, as oil bulls reacted to series of pharmaceutical companies announcing a potential Covid-19 vaccine. WTI Crude oil prices traded above $45.7 per barrel, while Brent oil prices soared past the $48.5 mark however, rally faltered near the end of the week over supply concerns and doubts related to vaccine distribution. Although still high with over 6.5% WoW increase, WTI Crude oil closed at $45.3 per barrel, while Brent oil closed at $48.1 per barrel.

According to the report issued by BMA Capital Management Limited, “improving macroeconomic indicators, strengthening rupee against the greenback, and unchanged policy rate, KSE-100 index will continue its positive momentum in the coming week.” However, the report advised investors to remain cautious amid soaring COVID-19 infections despite the announcement by the government to keep businesses and factories open.

During the week, sectors which lifted the index were Technology & Communications which advanced 8% followed by E&Ps by 6.9%, and chemicals by 2.7%. However, sectors which bucked the index were, OMCs by 0.7% and automobiles by 0.7%.

Investor participation, during the week climbed by 66% with average trading volumes clocking-in at 284 million shares, whereas value traded improved by 56% to average at $68 million. For the week, foreign investors continued to offload positions as the net sell clocked-in at $9.3mn. However, this selling was mainly absorbed by local companies and insurance with inflows of $3.4 million and 2.9 million respectively.