KARACHI: This week trading commenced on a negative note as the government unveiled missed targets for FY19 in the Economic Survey document along with arrest of Asif Ali Zardari (Ex-President) which resulted in the KSE-100 index decline by 938 points on Monday which is largest one-day closing of CY19.
[the_ad id=”31605″]Pakistan Stock Exchange (PSX) benchmark KSE-100 index however recovered subsequently and closed at 35,573 points up 0.2% or 68 points for the week ended June 14, 2019.
“The performance of the local bourse this week shadowed the timing of the federal budget, which was announced after market hours on Tuesday 11 June. Although new taxes were proposed or tax rates increased, they were mostly in line with the news flows that had been doing the rounds ahead of the budget. Once it was all over, the market underwent a relief rally from an oversold position,” Ahmed Lakhani at JS Global Capital said.
Foreign selling continued this week clocking-in at USD 4.9 million compared to a net sell of USD 2.3 million last week. Major selling was witnessed in Exploration & Production (USD 6.9 million) and all other sectors (USD 0.8 million).
On the local front, buying was reported by Individual (USD 2.8 million) followed by Mutual Funds (USD 2.7 million). That said, average daily volumes for the outgoing week were up by 9% to 136 million shares/day likewise value traded increased by 8% to USD 34 million/day.
Other major news: i) Economic growth to slow down to 2.4%: finance ministry, ii) Foreign exchange: SBP reserves drop 0.7% to stand at USD 7.8b, iii) With reforms, current account deficit may hit USD 7bn, iv) Passenger car sales down 4.11% in 11 months, and v) Shanghai Electric to finally acquire K-Electric this year.
“We view the market to remain positive in the upcoming weeks amid announced budgetary measures being positive for equities and making it the most attractive asset class for investors. On the other hand, activation of a PSX stabilization fund in the foreseeable future will also improve sentiments, we view. Albeit, economic concerns continue to hover for instance high Current Account Deficit, endless slide of the PKR against Green Back and further rate hikes expected with inflation set to tick higher post adjustment in utility prices (gas and electricity tariff hike),” a report issued by Arif Habib Limited said.