The Pakistan Stock Exchange (PSX) witnessed tepid trading in the outgoing week as uptrend in new virus cases kept market participants mostly on the sidelines. Resultantly, the KSE-100 index declined 320 points or 0.67% to end the week at 47,169.84 points.

“The KSE-100 Index closed on a negative note this week over Covid concerns and lack of triggers,” said JS Global analyst Amreen Soorani. The first trading session of the week saw the market declining over 350 points as strengthening dollar coupled with a plunge in international oil price dented investor sentiments.

The tally of domestic virus cases continued to mount in some densely populated districts in the country, limiting market participants’ ability to discount virus fears.

The market bounced back over the next two days and cushioned the dip amid robust financial results however trading remained mostly range bound.

Besides, Finance Minister Shaukat Tarin announced allocation of Rs10 billion to boost IT and telecom sector and enhance exports. This news in particular spurred bullish trading at the PSX.

Robust data of foreign remittances in July 2021 aided the KSE-100 index recoup some of the losses. Receipt of over $2.5 billion from the overseas Pakistanis in the past month painted an optimistic picture of the economy and motivated investors to assume fresh positions.

Moreover, encouraging car sales numbers, which depicted triple-digit growth in July 2021, rejuvenated investor interest and sparked cherry picking at the bourse.

Worsening political situation in Afghanistan also played on investors’ mind and looming uncertainty restrained the index from posting exorbitant gains.

The index reversed its direction once again in the last two sessions and reported losses owing to further depreciation in rupee which sparked panic over the current account situation.

“We anticipate the market to be positive next week, given expectation of strong results in the ongoing result season,” stated a report from Arif Habib Limited. “Meanwhile, concerns over fourth wave of Covid-19 and prevailing tensions in Afghanistan may keep the sentiment skittish.”

Average daily traded volume declined 33% week-on-week to 307 million shares while average daily traded value dropped 14% week-on-week to settle at $73 million.

In terms of sectors, negative contributions were led by cement (112 points), oil and gas marketing companies (67 points), oil and gas exploration (52 points), power generation and distribution (41 points) and fertiliser (39 points).

On the flip side, sectors that contributed positively included technology and communication (47 points) and food and personal care products (37 points).

Scrip-wise, negative contributors were Lucky Cement (43 points), Pakistan Petroleum (32 points), Hubco (32 points), PSO (32 points) and Oil and Gas Development Company (31 points).

Meanwhile, TRG Pakistan (83 points), Meezan Bank (46 points), and FrieslandCampina Engro Pakistan (44 points) contributed negatively to the index.

Foreign buying continued this week, clocking-in at $4 million against a net buy of $3.1 million last week. Buying was witnessed in technology ($4.2 million), banks ($0.9 million) and fertiliser ($0.3 million) sectors.

On the domestic front, major selling was reported by insurance ($6.6 million) and individuals ($3 million).

Among other major news of the week; services exports grew by 9.19% to $5.937 billion, Lucky Group got permission to set up assembly plant for Samsung mobile devices, K-Electric signed 150mmcfd RLNG supply deal with PLL, and textile exports rose by 21% in fiscal year 2020-21.

Published in The Express Tribune, August 15th, 2021.

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