Pakistan Stock Exchange remained under pressure during the outgoing week ended on September 7, 2018 due to selling in various sectors. BRIndex100 lost 93.68 points on week-on-week basis to close at 4,389.50 points from previous week's close of 4,483.18 level. Average daily volumes stood at 125.816 million shares.
BRIndex30 decreased by 695.75 points to close at 21,839.76 points with average daily turnover of 92.540 million shares. Pakistan's benchmark KSE-100 index declined by 887.47 points and closed at 40,854.77 points. Trading activities remained low as average daily volumes on ready counter decreased by 21.9 percent to 138.65 million shares as compared to previous week's average of 177.48 million shares. Average daily trading value declined by 35.6 percent to Rs 4.88 billion.
The foreign investors remained net sellers of shares worth $9.5 million during the week. Total market capitalization declined by Rs 190 billion to Rs 8.487 trillion. An analyst at AKD Securities said that with a modest recovery in the first couple of days, KSE-100 index spiraled down over the week erasing all calendar year 18 to date gains (up 0.35 percent) to close at 40,855 points, down 2.1 percent, back at levels last seen in end-July. Showcasing all the tell-tale signs of a highly volatile, illiquid and shifty near term outlook, investors seem to remain cautious, based on a number of crucial, time sensitive decisions for the nascent government where clarity is awaited (headway on IMF negotiations vital) and growing risk of a cyclical downturn in consumption led demand where monetary tightening and high fuel prices make for a terse spending backdrop.
Constituents of the leader board were ABL (up 2.3 percent), KAPCO (up 2.1 percent), UBL (up 1.9 percent), KEL (up 1.5 percent), whereas laggards were PIOC (down 10.9 percent), DGKC (down 9.3 percent, CHCC (down 9.1 percent) and NCL (down 6.8 percent).
An analyst at JS Global Capital said spells of bearish sentiment continued at the local bourse as the KSE-100 index declined by 2.1 percent on week-on-week basis. "We believe investors remained cautious during the week due to demanding economic decisions emerging from the new government," he said. These included reported plans to increase industrial gas prices by 26 percent (average across-the-board increase of 46 percent), followed by Economic Advisory Council's (EAC) recommendations of withdrawing subsidies.
This was in addition to Economic Coordination Committee's (ECC) approval of Rs 2/unit hike in electricity prices. Where the price hike is anticipated to partially ease the Gas utilities' ongoing cash flow constraints, investor sentiments in Sui Northern Gas Pipeline (SNGP, down 2.2 percent) and Sui Southern Gas Pipeline (SSGC, down 0.3 percent) remained negative. On the other hand, sectors such as Fertilizers (down 2.5 percent) and Glass & Ceramics (down 5.0 percent) felt the heat on account of expected pressure on profitability with increase in fuel costs. In addition to higher fuel costs, weak cement dispatches for August 2018 (down 8 percent) added to the blow on the Cement sector (down 5.0 percent). Refineries (down 7.3 percent) also lost value during the week on news of Senate panel directing to discontinue deemed duties in petroleum prices.
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