KARACHI: Sentiment at Pakistan Stock Exchange (PSX) was remained positive at the last week ended supported by significant developments on the economic and political front.
Overall, week on week basis the benchmark KSE-100 index gained 1.5 percent or 668 points to close at 46,421 points end of the last week compared to 45,753 points a week earlier.
Market capitalization also rose by Rs 101 billion to Rs 6.873 trillion end of the week. However, average daily trading volume at ready counter declined by 13.4 percent to 139 million shares.
During the week under review, BRIndex100 increased by 72 points during this week to close at 4,655 points up from 4,583 points with average daily turnover of 108.4 million shares.
BRIndex30 inched up by 389 points on week-on-week basis to close at 16,623 points with average daily trading volumes of 65 million shares.
Analysts at Arif Habib Limited said that on the political front, the Election Commission of Pakistan has announced that the general elections in the country would be held in the last week of Jan’24, which has effectively settled uncertainty in the market.
Moreover, in the latest treasury bills auction cut-off yeild declined by as much as 217 basis points for various tenors. In addition to this, the PKR exhibited a consistent appreciation trend over the course of the week. PKR closed against USD at 291.76, gaining PKR 5.1|+1.7% WoW, this led to an increase in confidence among market participants, reinforcing their positive outlook on the market. In addition, last week SBP’s reserves increased by $56 million, reaching $7.7 billion.
During the last week, sector-wise positive contributions came from Commercial Banks (202pts), Power Generation & Distribution (111pts), Oil & Gas Exploration Companies (96pts), Chemical (77pts), and Pharmaceutical (31pts).
Meanwhile, the sectors which mainly contributed negatively were Technology & Communication (14pts), and Fertilizer (7pts). Scrip-wise positive contributors were UBL (106pts), HUBC (103pts), COLG (59pts), MCB (49pts), and PPL (35pts). Meanwhile, scrip-wise negative contributions came from SYS (28pts), ENGRO (20pts), UPFL (10pts), CHCC (9pts), and BAFL (9pts).
Foreigner buying was witnessed during this week, clocking in at USD 0.29mn compared to a net sell of USD 9.67mn last week. Major buying was witnessed in Commercial Banks (USD 1.69mn) and Technology and Communication (USD 1.3mn). On the local front, selling was reported by Insurance Companies (USD 1.35mn) followed by Banks / DFIs (USD 1.21mn). Average volumes arrived at 139mn shares (down by 13% WoW) while the average value traded settled at USD 15.4mn (down by 25% WoW).
According to Topline this recovery in market can be attributed to appreciation of Rupee against USD, Election Commission of Pakistan statement that general elections will be held by end of January 2024 and partly to statement by statement by Barrick Gold Corp CEO were he highlighted newfound interest by multinational mining firms to develop $7bn Reko Diq gold and copper mine in Balochistan.
On the economic news front, as per PBS, Large Scale Manufacturing posted a 1.1% decline YoY in Jul-2023. While the data remained in the red zone for the 11th consecutive month, the declining pace contracted over lower base. On a MoM basis, July continued to witness a 3.6% decrease in output.
Copyright Business Recorder, 2023
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