Daily Times

The Pakistan Stock Exchange (PSX) is likely to remain positive in the week starting today (Monday), specially in its second half, due to conclusion of technical-level talks between Pakistan and the International Monetary Fund (IMF) on a positive note, resumption of the talks between US and Afghanistan, and the government’s steps to shield rupee from further depreciation against the dollar.

However, consistent depreciation of the rupee against the US dollar, continuous surge in global commodity prices, and uncertainty on the geopolitical front may keep the bourse under pressure. The imminent pressure that the market will face on Monday is 1.21 percent increase in inflation for the week ended on October 07, 2021, after witnessing a decrease for the past two consecutive weeks, while it went 12.94 percent up on a year-on-year basis.

The market has gone down for four weeks in a row and a possible reversion is overdue, as there is no major unprecedented problem on the economic side while companies’ fundamentals are also strong. The financial results of the companies are being announced and most of the companies have shown unprecedented results in their history. Moreover, decline in infection ratio of the novel coronavirus in Pakistan and slowdown in global oil prices would release pressure from external accounts.

On the other hand, shares’ prices have suffered more as compared to the drop in the index level. The market experts said that the index is in an oversold position and shares of some major companies are available at very attractive prices. They view the situation as buying-time. They believe that the market has declined higher than warranted, while the decision with the IMF will likely simmer the possibilities of a thaw in US-Pakistan relations while also bringing clarity to several measures to be taken during the current fiscal year, including energy tariff hikes and fiscal improvements. The benchmark KSE-100 Index shed 394.46 points (-0.87 percent) to close at 44,477.23 points, while the KSE-30 Index shed 83.36 points (-0.47 percent) to close at 17,524.8 points.

Negative contributions came mainly from cement (-268 points), fertilizer (-94 points), oil and gas marketing companies (-47 points), power generation and distribution (-30 points), and engineering (-25 points). Scrip-wise major losers were LUCK (-139 points), FFC (-45 points), PPL (-39 points), CHCC (-38 points), and SNGP (-34 points).

The foreign investors remained net sellers during the week with an outflow of $3.7 million against an outflow of $21.85 million last week. The major selling was done by foreign corporates amounting to a net $6.25 million, while sector-wise major selling was witnessed in commercial banks ($9.85 million) and fertilizer ($4.33 million).