The Pakistan Stock Exchange (PSE) has shown some signs of revival in the last week ended on 25th March, mainly due to a dramatic drop in the country’s current account deficit (CAD) in February 2022 and the historic settlement of the Reko Diq dispute.
As a result, the KSE-100 benchmark index finished the week up 521.17 points, or 1.21 percent, at a level of 43,551 points.
The drastic drop in February’s current account deficit number of $545 million, according to a Topline Securities report, “may be linked to some rebound in the market.” The week began with a big rebound in the market after Pakistan’s current account deficit was reduced to an eight-month low. In addition, positive Reko Diq developments fueled optimistic trading.
After negotiating an out-of-court settlement on the Reko Diq project and securing assurance of investment worth $10 billion in Balochistan, the country avoided a penalty of $11 billion last weekend, creating 8,000 new employments. Thus, investors snatched up stocks across the board at bargain prices. On Tuesday, the bourse turned around and saw profit-taking as the rupee’s decline against the US dollar weighed on investors’ minds. As the country’s political instability raged on, the bourse also took a hit.
During the final two trading days of the week, the market reversed its bearish trend and achieved a slight gain.
The prospect of a resolution to internal political concerns was the primary driving force behind the buying activity. The advances at the NYSE were restricted by a rise in T-bills auction yields in the secondary market.
According to a study by Arif Habib Limited, “we expect the market to remain rangebound next week due to political turmoil and the imminent vote of no-confidence.” There should be caution in the market as well since any hints that oil prices may be easing might have a positive effect on the local bourse.” The average daily traded volume fell by 17.4pc week-on-week to 143.7 million shares, while the average daily value traded fell by 1.5pc week-on-week to $25.8 million during the week under review.
Fertilizer (160 points), cement (97 points), power generation and distribution (57 points), commercial banks (56 points), and chemical industries all made significant contributions (47 points).