The benchmark KSE-100 index depicted some recovery in the outgoing week with a meagre gain of 0.91% week-on-week compared to last week’s loss of 0.67%, standing at 47,599.82 points.

The market managed to finish two sessions out of the three sessions in the green during the short week. The stock market remained closed for two days on account of 9th and 10th Muharram.

Trading was subdued with volumes remaining low throughout the week as the prevailing geopolitical tensions forced market players to trade cautiously. The week kicked off on a negative note, in line with worsening situation in Afghanistan.

During the session, the benchmark KSE-100 index fell below the 47,000-point mark, but some clarity on the situation in Kabul inflated gains in the next two sessions.

Fortunately, tables turned on Tuesday and the market recouped losses incurred in the previous session and the index once again surpassed the 47,000-point mark. Investors also cheered extension of power and gas subsidy for the export sector by an additional year.

Moreover, the local bourse also reacted to the performance of global markets which calmed after the Afghan government announced general amnesty for government officials and assured uninterrupted evacuation of affectees.

Trading then resumed on Friday and carried forward the positive momentum. Despite dismal foreign direct investment (FDI) inflows, which slowed down to an eight-month low of $89.9 million in July, investors remained optimistic throughout the session.

“Going forward, we expect the market to remain positive in the upcoming week attributable to crashing global commodity prices and the ongoing result season which will keep specific companies under limelight,” stated a report from Arif Habib Limited.

“On the other hand, decline in infection ratio of the novel coronavirus in Pakistan and slowdown in global oil prices would release pressure from external account.”

Average daily traded volume declined 13% week-on-week to 266 million shares while average daily traded value dropped 4% week-on-week to settle at $70 million.

In terms of sectors, positive contributions were led by cement (151 points), commercial banks (86 points), power generation and distribution (72 points), oil and gas marketing companies (65 points) and fertiliser (41 points).

Scrip-wise, positive contributors were Meezan Bank (73 points), Hubco (62 points), Pakistan State Oil (57 points), DG Khan Cement (40 points) and Maple Leaf Cement Factory (36 points). Meanwhile, Pakistan Petroleum (18 points), Kohinoor Textile Mills (16 points), Nestle Pakistan (11 points), Pakistan Services (11 points) and Mari Petroleum (10 points) contributed negatively to the index.

Foreigner offloaded stocks this week worth $10.82 million against a net buy of $3.95 million last week. selling was witnessed in all other sectors ($10.79 million) and cement ($2.53 million) sectors. On the domestic front, major buying was reported by companies ($7.78 million) and mutual funds ($5.87 million).

Among other major news of the week; Roshan Digital Account inflows reached $2 billion mark in 11 months, LSM surged by 14.85% in FY21, $2.77 billion were received from IMF to help facilitate increased imports, Pakistani bonds hit as investors brace for Afghanistan fallout, and foreign direct investment plunges by 38.7% in July.

Published in The Express Tribune, August 22nd, 2021.

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