The Pakistan Stock Exchange saw tepid activity for most part of the outgoing week as pending approval of the State Bank of Pakistan Amendment Bill and mini-budget played on investors’ mind and kept the benchmark KSE-100 index range bound.

Panic over the proposed imposition of fresh taxes in the Finance Supplementary Bill, weakening economy and looming threat of lockdowns prevented market participants from pouring hefty amounts into the bourse and restrained the index from posting substantial gains.

As a result, the KSE-100 index rose 417.80 points, or 0.9%, to close the week at 45,763 points.

The index recorded a jump of close to 550 points on Monday, aided by the robust export data. Increase in foreign shipments from Pakistan despite the Covid-19 challenges and supply chain disruption revived investors’ interest and they cherry-picked attractive stocks.

For the remaining part of the week, the market remained range bound and recorded slight gains or losses.

A mix of upside and downside pressure kept the market flat in the next session. While the surging tally of Covid-19 infections sparked selling pressure, the projection of lofty foreign inflows and strong financial results from companies triggered a fresh spell of buying.

In the middle of the week, the market inched upwards owing to the much-needed clarity about the delay in discussion of Pakistan’s case by the International Monetary Fund (IMF) board.

The global lender agreed on the government of Pakistan’s request to consider the country’s case in its board meeting at the end of January. Earlier, the IMF was scheduled to take up Pakistan’s case on January 12.

Bears returned to the Pakistan Stock Exchange on Thursday owing to the lack of positive triggers and a sharp increase in Covid-19 cases. In addition to that, the debate on SBP Amendment Bill and mini-budget in the National Assembly kept investors on the sidelines.

The market remained flat in the last session of the week as investor sentiment remained mixed following the approval of two vital bills by the National Assembly to pave the way for resumption of IMF’s loan programme.

Market players panicked over rumours of further worsening of economic indicators in the short run and imposition of stringent measures to revive the IMF programme.

Throughout the week, the KSE-100 index received support from recovery of the rupee against the US dollar, which signaled the recovery of the economy.

“We expect the market to remain positive in the upcoming week. With the commencement of result season, certain sectors and stocks are expected to be in the limelight,” stated a report of Arif Habib Limited.

“Moreover, any update with regard to the IMF’s sixth review will have an impact on the market.”

During the week under review, average daily traded volumes rose 12% week-on-week to 356 million shares while average daily traded value climbed 12% week-on-week to $51 million.

In terms of sectors, the contribution to the upside was led by commercial banks (328 points), miscellaneous (54 points), chemical (50 points), power generation and distribution (47 points) and oil and gas exploration (37 points).

Sectors which contributed negatively were cement (67 points), technology and communication (64 points) and fertiliser (26 points).

Stock-wise positive contributors were HBL (87 points), MCB (73 points), Pakistan Services Limited (57 points), Hubco (43 points) and Colgate-Palmolive (39 points).

Meanwhile, stock-wise negative contribution came from Systems Limited (53 points), Lucky Cement (38 points) and Engro (33 points).

Foreign investors were net buyers in the week under review, who bought shares worth a net $0.53 million compared to net buying of $24.2 million in the previous week.

Major buying was witnessed in technology companies ($0.5 million) and power firms ($0.4 million). On the domestic front, selling was reported by mutual funds ($9.9 million), followed by companies ($2.4 million).

Among other major news of the week included PTCL and SCO announcing to explore collaborative opportunities, Cnergyico going to acquire 57.37% stake in Puma Energy, Nepra allowing a cheaper tariff rate of Rs12.96 per unit for K-Electric consumers, World Bank projecting 3.4% GDP growth for Pakistan and circular debt touching the Rs2.41 trillion mark.

Published in The Express Tribune, January 16th, 2022.

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