Daily Times

Pakistan Stock Exchange (PSX) witnessed a sharp recovery on the last trading day of the week, halting a four-day rampage during which the benchmark kse-100 index lost over 3000 points. On Friday the index gained 1,008 points by the closing bell and cross 43,000 mark to close at 43,788.08 level.

Friday’s robust performance was witnessed owing to market’s excitement for the senate chairman election, and investors’ anticipation of a possible victory for the government. Friday’s positive sentiments came as bears halted their streak at the bourse, which was triggered since as surprise Senate upset, in the previous week, when Government’s candidate and finance minister Hafeez Sheikh lost to opposition alliance PDM led Yousaf Raza gillani, following an apparent horse-trading, which sent investors to panic sell.

On Friday, the major rally was led by cement, steel, banking and technology stocks. During the session, the index remained in the green throughout the day, touching its intraday high at 43,986.18 after gathering 1,206.42 points. The volume at Kse-100 receded from 196.93 million shares recorded in the previous session to 169.8 million shares however, the all-share volume surged from 406.1 million shares recorded in the previous session to 442.56 million shares. Market Capital increased by Rs.145.38 Billion, while total value traded increased by 3.87 Billion to Rs.21.59 Billion.

The volume chart was led by Unity Foods Limited, TRG Pakistan Limited and Jahangir Siddiqui & Company Limited. The scrips exchanged 88.26 million, 38.84 million and 17.74 million shares, respectively.

According to the National Clearing Company of Pakistan Limited (NCCPL) foreign investors were net sellers of worth $2.18 million worth of equities. Among local investors, Individuals and Companies led the selling chart, and off-loaded $4.31 million and $4.06 million worth of equities. However, Mutual Funds, Insurance Companies and Brokers mopped up $6.17 million, $3.14 million and $1.08 million worth of equities.

During the session, sectors which lifted the index were Cement with 223 points, Commercial Banks with 151 points, Oil & Gas Exploration Companies with 90 points, Power Generation & Distribution with 83 points and Oil & Gas Marketing Companies with 70 points. Among the scrips, the most points added to the index was by Lucky Cement Limited which contributed 76 points followed by Hub Power Company Limited with 61 points, Habib Bank Limited with 46 points, Pakistan State Oil with 43 points and Systems Limited with 43 points.

However, sectors which continued to weigh down the index were Miscellaneous with 2 points and Synthetic & Rayon with 1 points. Among the scrips ,the most points taken off the index was by Azgard Nine Limited which stripped the index of 8 points followed by Engro Corporation Limited with 6 points, TRG Pakistan Limited with 4 points, Abbott Laboratories (Pakistan) Limited with 2 points and Shifa International Hospitals Limited with 2 points.

Weekly Review: Inflation, political uncertainty concerns dented index by 4.5pc

The index witnessed a sharp decline during the week, which reflected investor feeling of all gloom and doom when the index closed at 43,788 points, 4.5% lower in comparison to the previous week, recording the lowest close level this year, and turning (year to date) YRD return for CY20 negative.

The cause of the rapid investor exit from the equity market was mainly due to concerns about inflation, political uncertainty, PM’s approval on abolishment of corporate income tax exemptions. The last day of the week, however, saw investors returning in hoards and lift the index from its week low of 42,780 points, albeit slightly.

Political uncertainty and finance bill tax amendment drag the market down: Despite the victory of the present government in the ‘vote of confidence’ in national assembly on Saturday last week, the index faced heavy selling pressure amid uncertainty around the election of Senate chairman. Additionally, the PM approved an income tax amendment bill last week for withdrawal of 80 different income tax exemptions on corporations to meet IMF conditions, which is expected to increase government revenue collection by Rs. 70 -140 billion, but conversely place tax burden on companies.

Moreover, investors also panicked over the recent upsurge in inflation (primarily due to international crude oil prices) as they speculate about upcoming monetary policy and impact thereof on cyclicals. During the week Trading volumes improved by 12 % to average at 432 Million shares, similarly average trading value increased by 6.2% to clock-in at $137 million.

NCCPL data revealed that during the week, foreign investors remained net buyers of worth $3.64 million worth of equities. Among local investors, Mutual Funds led the selling chart and offloaded $9.05 million worth of equities, followed by Insurance companies and companies with $5.63 million and $1.28 million worth of equities. While, the buying chart was led by Individuals, Banks and other organizations, which bought $5.9 million, $ 4.28 million and $1.9 million worth of equities.