Daily Times

Stocks staged sharp recovery in the departed week at the Pakistan Stock Exchange (PSX) as benchmark kse-100 index advanced by a solid 740 points from the last working week’s close to conclude at 45,915 level after investors returned from an extended Eid break.

However, despite the series of positive news flow, the market showcased resistance near the 46,000 mark, and the index oscillated between a week’s high of 46,034 level and low of 45,353 level, respectively.

During the week, the traded volumes averaged at 609 million shares which surged by 2.5 times, whereas traded value clocked-in at $137 million.While the net market capital increased by Rs 153.32 billion.

Among the scrips, Yousaf Weaving Mills Limited was the top performer, which gained 22.5pc followed by Hascol petroleum limited which gained 20.2pc, K-electric Limited gained 14.9pc, Unity gained 14.9pc and Sui north gas pipelines Limited gained 10.3pc.

Among the top losers, ANL posted most losses, and receded 8.4pc followed by AGP which lost 5.7pc, Systems Limited lost 4pc, HBL Growth Fund lost 3.2pc and Ibrahim Fibres Limited lost 2.9pc.

According to the National Clearing Company of Pakistan Limited (NCCPL),among forein investors; foreign individuals offloaded $0.88 million worth of equities, foreign corporates sold off $42.9 million worth of stocks and overseas Pakistanis sold $5.53 million of stocks, taking the net selling to about $49.35 million worth of stocks.

Among the local investors, Individuals led the buying chart, followed by Companies and other organizations, which mopped up about $37 million, $18 million and $1.68 million worth of stock respectively.

However, Banks and Insurance Companies led the selling chart, which offloaded $3.29 and $3.36 million worth of equities. The week started on a positive note with the index climbing 621 points on Monday as the virus started to lose its grip with the infection ratio declining to 8 pc on average. Consequently, the government relaxed the Covid lockdown which boosted the investor sentiments.

The index also cheered MSCI Emerging Market (EM) index rebalancing in which Pakistan’s weight slightly improved to 0.02pc. Among the companies, Lucky Cement was upgraded to EM Standard Index, whereas Oil & Gas Development Company Limited was deleted from the main index. Moreover, TRG Pakistan was also added to MSCI Small Cap Index, which drove investor sentiments.

Investors also welcomed record record-high remittances of 2.8 billion, posting a surge of 56% Year on year in Apr’2021.

However, market sentiments were kept in check owing to political din, which arose from rifts between senior members of the ruling party. However, by the end of the week, the government was able to iron out its differences with the estranged leaders, which resulted in a better closing by the week’s end.

During the week, energy stocks too dragged down the index due to uncertainty around international crude oil prices amidst news of return of Iranian crude supplies. As a result, international benchmark Brent crude oil dropped 5pc in comparison to previous week to settle at $65.1 barrel, while US WTI crude was also down by about 5 pc to settle at $62/ barrel.

Market remained upbeat on the last trading day of the week, over anticipation of tax incentives for the industries in the upcoming budget, as well as last minute news of deferral of Oil & Gas Development Company Limited and Pakistan Petroleum Limited for consideration of privatization, which resulted in a rebound in stock prices of both stocks.

Market sentiments were also driven by upward revision of an estimated provisional GDP growth for the 2020/21 financial year at 3.94per cent, almost double the IMF and World Bank’s forecasts.

In the week ahead, upcoming rollover week may keep the index under pressure, and the pre-budget speculations are expected to set the direction of the market going forward.Moreover, market participants will also monitor monetary policy review, due next week. It is perhaps germane to mention that the cut-off yields during the T-bill auctions remained largely unchanged (except for the 6 months paper that underwent an increase of a meagre 5.0bps), which implies that State Bank of Pakistan is expected to keep the status quo on policy rate.