KARACHI: Border tensions between Pakistan and India remained on the forefront during the week ended March 01, 2019 resulting in a volatility for the Pakistan Stock Exchange (PSE) benchmark KSE-100 index. The market recovered slightly on the last day of the week as Pakistan agreed to release the Indian pilot to de-escalate tensions.
The benchmark KSE-100 index closed at 39,539 points, down 1.2 percent or 477 points in the week. Market participation increased as evident from decrease in average daily turnover (ADT) and average daily traded volume (ADTV) by 51.9 percent and 33.1 percent, respectively.
“The situation escalated between India and Pakistan after the Pulwama attack last week, and an Indian airplane was shot down in Pakistani territory by local armed forces. A war-like situation was emerging which created panic among market participants and led to bearish momentum for the majority of the week,” Ahmed Lakhani at JS Global Capital said.
Foreign investors were net sellers, exhibiting an outflow of $1.3 million. Selling was witnessed in Commercial Banks ($1.9 million) and Exploration & Production ($0.4 million). On the domestic front, major buying was reported by Insurance Companies ($15.6 million) and Companies ($4.7 million).
During the outgoing week, petroleum product prices were increased for Mar-2019, however lower than OGRA recommendations, China is expected to give $1 billion grant for early harvest projects, PM is soon to announce Rs 3,500/maund indicative price for cotton, Fitch report suggests IMF and Pakistan to soon reach to $12 billion bailout deal, National Assembly likely to adopt finance bill by next week, and Hyundai Nishat Motor launches Santa Fe and Grand Starex.[the_ad id=”32940″]“We expect the market to bounce back next week with tension between India and Pakistan to face a significant suppression following the release of the IAF pilot. Enticing valuations of various stocks open up lucrative buying opportunities. We suggest accumulation of blue-chip stocks that are trading at cheap multiples,” a report issued by Arif Habib Limited noted.