KARACHI: After a relief rally witnessed post Federal Budget FY20 announcement last week, the Pakistan Stock Exchange (PSX) benchmark KSE-100 index took its course back to correction. The KSE-100 index declined by 1.3% losing 448 points and closing at 35,125 levels for the week ended June 21, 2019. [the_ad id=”31605″]The week also witnessed slower activity as 8.5% WoW lower volumes reflected thinner market participation. Moreover, net foreign investors’ portfolio investment (FIPI) outflow also widened during the week to the tune of US$5.7 millionn, vis-a-vis US$4.8 million last week.
“Weakness of the Pak Rupee against USD, unchanged Fitch’s rating and ongoing debate over the Federal Budget FY20 in the Parliament kept the domestic bourse in-check this week, while given lack of triggers, investors opted for profit taking in large caps,” an analyst at Arif Habib Ltd said.
Budget remained in limelight in the National Assembly as well as the media, sector performances did not show the same extent of pessimism. “Textile Composite, which remained under discussion over negative implications on account of removal of zero-rated status, closed in green with 0.6% WoW gain this week. Moreover, higher international oil prices (+8% WoW) also took gains of Oil and Gas Exploration Companies to 0.7% WoW this week,” Amreen Soorani at JS Global Capital said.
Other major news includes State Bank of Pakistan (SBP) governor said prior actions taken to secure IMF loan, foreign direct investment (FDI) plunged 49% in July-May, current account deficit (CAD) shrank 29% in 11 months, restoration of sales tax zero-rating refused, and government to float Rs200 billion Sukuk next week for slashing circular debt.
“With the State Bank Governor echoing the incumbent governments existing stance of fulfilling IMF’s prior actions, we view the upcoming Board agreement expected in Jul’19 to be a major trigger for the market as it would set in motion a period of economic recovery,” Arif Habib Limited report noted.