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- The market got off to a grim start in the outgoing week.
- Volumes thinned to 228.4 million shares.
- Arrival of ADB’s $1.5b to help boost sentiment down the line.
KARACHI: Pakistan Stock Exchange (PSX) is largely seen on firm footing next week drawing strength from the Financial Action Task Force (FATF) victory amid hopes that Asian Development Bank (ADB) will release $1.5 billion shortly; however, political risks remain a threat.
The benchmark KSE-100 index, the main gauge of the country’s capital market, gained 265 points or 0.62% week-on-week, which analysts attributed to a 73% year-on-year and 53% month-on-month fall in current account deficit in September amid bets it was Pakistan’s last week on FATF’s list of countries under increased monitoring for money-laundering and terror-financing.
The market got off to a grim start in the outgoing week that was mostly marred by political bad weather as the government remained pitted against the opposition with PTI threatening the ruling collation with a tougher-than-the-last ‘long march’ which remains unscheduled so far.
Investor participation declined through the outgoing week as average daily traded volume and value stood at 228.4 million shares, down by 14.5% week-on-week, and Rs6.26bn, down by 34% week-on-week, respectively.
Foreign selling clocked in at $3.4 million compared to a net buy of $12.3 million last week. Major selling was witnessed in commercial banks ($1.9 million), technology ($1.1 million) and other sectors ($0.9 million).
On the local front, buying was reported by Individuals ($5.4 million) followed by Broker Proprietary Trading ($0.9 million).
Major gainers and losers of the week
Sector-wise positive contributions came from fertilisers (+112 points), power (+82 points), exploration and production (+49 points), banks (+37 points), and tobacco (+31 points).
Whereas, sectors that weighed on stocks were technology (-40 points), and chemical (-28 points).
Scrip-wise positive contributors were Hubso (+80 points), Engro Corporation (+77 points), Mari Petroleum (+51 points), Pakistan Oilfields (+44 points), and Millat Tractors (+40 points).
While the major losers were Pakistan Petroluem (-31 points), Pakistan State Oil (-26 points), Systems Limited (-19 points), TRG Pakistan (- 18 points), and Engro Polymer and Chemical (- 16 points).
Major developments during the week
During the week, the rupee remained under pressure against the greenback, closing at Rs220.84 (down by Rs2.41 or 1% week-on-week).
Furthermore, SBP reserves remained unchanged at $7.6 billion. In addition to this, foreign direct investment declined by 47% year-on-year during the first quarter of the current fiscal year 2022-23.
The momentum shifted towards the green zone since the current account deficit narrowed by 72.5% year-on-year to $316 million during September, the lowest since April 2021.
Furthermore, a statement from the USA showing confidence in Pakistan’s nuclear strengthened the sentiment, which boosted investor morale.
Moreover, a loan worth $1.5 billion from ADB was finalised during the week, which kept the momentum strong.
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