Daily Times

Many promising and depressing news pushed the Pakistan Stock Exchange (PSX) into a rangebound trading week, with the KSE-100 index experiencing both bullish and bearish pressures.

The monetary policy meeting and the Senate’s passage of the SBP Amendment Bill delighted market players, but Covid-19 infections and the impending review of Pakistan’s case by the IMF kept stock trading subdued.

As yields on T-bills and PIBs fell, investors cheered that the next monetary policy statement will result in a reduction in the benchmark KSE-100 index’s policy rate. This led to two straight days of gains for the benchmark KSE-100 index.

The KSE-100 index gained 60 points, or 0.13 percent, in the week ending January 28 to settle at 45,077.91.

According to Arif Habib Limited’s report, “rising Covid-19 instances and deferral of the IMF’s review kept the market range-restricted.”

KSE-100 index fell in the first two sessions of this week because to the monetary policy committee (MPC) meeting’s background There were those who predicted no change in monetary policy and those who predicted a rise in interest rates.

Investors’ faith in the economy was shaken by the previous weekend’s announcement of an unsustainable current account number, which prompted a rush to protect their positions.

Energy and commodity costs have been rising steadily, which has put pressure on the market. When oil prices rose beyond $90 per barrel, investors became alarmed, fearing an even greater increase in the country’s unsustainable import bill.

Fears of a shutdown and suspension of commercial activity in the country due to a rise in Covid-19 instances prevented investors from making new purchases. Slowing expansion in large-scale manufacturing further affected investor interest as they sold their stock holdings.

The market’s last session ended flat as both upward and downward pressures weighed on prices. Fears of higher inflation in January 2022 prompted a sell-off on the stock market, wiping out any gains made following the Senate’s passage of the SBP Amendment Bill.

According to Arif Habib Limited, “With the IMF’s sixth review of Pakistan’s economy slated for February 2, any positive outcome might be a significant trigger.” The ongoing results season is also expected to put a spotlight on specific industries and companies.

The average daily volume of 187 million shares and the average daily value of $38 million decreased by 7 percent and 9 percent, respectively, during the week under review.

Cement (55 points), power generation and distribution (45 points), food and personal care items (30 points), fertilizer (26 points), and commercial banks (26 points) were the sectors that contributed the most points overall (24 points).

Technology and communication (52 points), oil and gas exploration (50 points), and car assembly (50 points) were the only industries that had a negative impact on the score (14 points).

Bank Alfalah (38 points), Lucky Cement (36) Fauji Fertilizer Company (32), and TRG Pakistan (32) all contributed positively to the index (30 points).

Meanwhile, Kapco (30 points), Mari Petroleum (24 points), and Bank AL Habib had negative stock-market contributions (23 points).

It was a continuation of the previous week’s net selling of $2.09 million in foreign sales, which came in at $4 million this week.

A total of $2.4 million was sold by the technology and communications industries while $1 million was sold by cement companies. Companies made the biggest purchases domestically, spending $19.5 million, followed by mutual funds with $4.8 million.

There was also the launch of motorcycle fuel cards, State Life signing a memorandum of understanding with UBL, a decline in foreign currency reserves of $867 million, the Bank of Punjab planning to raise Rs13 billion in debt financing for Lucky Electric, and Pakistan Refinery Sharing plans to start exporting furnace oil from next month.