KARACHI: After four volatile trading sessions, Pakistan equities closed the week ended May 30, 2019 at 35,975 levels as the benchmark KSE-100 index gained 0.8 percent. During the week, average daily traded volumes shrunk by 8.0 percent to 165 million shares/day while daily traded value averaged at US$44 million, up 12 percent.[the_ad id=”31605″]“Anticipation of Market Support Funds attracted positive sentiments alongside high volumes. The four day week commenced on a negative note amid lack of clarity over the funds, but, later during the week bulls took over after two support funds were approved by government worth PKR 20 billion. Moreover, Pak Rupee gained some strength against the greenback, which further kept the sentiment positive,” a report issued by Arif Habib Limited said.
Foreign selling was witnessed this week clocking-in at USD 2.95 million compared to a net buy of USD 0.02 million last week.
Furthermore, the government announced that a tax target of Rs5.55 trillion for FY20 has been set. “Undoubtedly, meeting such an ambitious target would require drastic actions, something that has made the markets anxious. The government has also decided to withdraw the benefits available to zero-rated sectors, sparking much protest from relevant industry players,” Ali Zaidi at JS Global Capital said.
Other notable news during the week include (1) Pakistan is all set to enter the US$15 billion Chinese meat market, (2) Drug Regulatory Authority (DRAP) cut prices of 78 medicines (3) Chinese Vice President’s visit to Pakistan, (4) agreement with Qatar to import 200mmcfd LNG at 20 percent less cost, (5) a new petroleum policy is on the cards under which auction of 40 new oil and gas blocks will begin in December 2019 and (6) shifting of China’s US$2 billion safe deposit to loan category.
With the incumbent government expected to present its maiden Federal Budget in the week following Eid Holidays, analysts anticipate investors to take a cautious stance.