Home / This Week / Market / Stock Watch

Stock Watch

INDEX RECOVERS AFTER DROPPING TO YEAR’S LOWEST LEVEL
SUMMARY

Stock exchange remained under the influence of joint investigation team (JIT) report throughout the week as it was presented on Monday to the Supreme Court. The political scenario developed during the findings of the report had somehow its impact on the investors who were cautious in their trading as the volume this week remained low at an average of 174 million shares while market capitalization declined to Rs9.109 trillion.

KSE-100 Index surged 1,051 points on Monday when JIT submitted its report. The order of the Supreme Court that adjourned the proceedings until next week went well and the Index gained 1,051,66 points to close at 46,273.81. Market witnessed a bullish trend with healthy buying by Mutual Funds worth $15.38m. Commercial Banks like MCB (up3.43pc), ABL (up 4.82 pc), HBL (up 1.65pc), UBL(up 0.51pc), MEBL (up 2.39pc), NBP(up2.39 pc), & SSGC (up 4.68 pc). Volume too increased to 235m shares.

On Tuesday there was extremely panic situation at PSX as it plunged 2153.23 points, which was the biggest-ever single-day decline since February 25, 2009. It wiped out Rs403 billion from the shareholder’s wealth .The investors slowly understood the under lying points of the report submitted by the JIT. The Index closed at 44,120.58 registering a drop of 4.65 percent.

Moreover a bearish trend was strengthened on Wednesday as KSE-100 Index lost another 328.28 points. The volatility, which started on Monday continued on Wednesday. This volatility is expected to continue till final verdict in unfolded on July17 — the date of hearing set for JIT. The Index slipped by 1,093 points in the early hours of trading session to later recovery to close at 43792.19.

However on Thursday, the Index started on positive note for a brief period and then entering a downward path. Investors remained cautious and refrained from participation due to uncertain domestic political scenario. The stock closed flat shedding 8.64 points to close at 43783.55.

On the last day of the week Friday, the stocks recovered 554 points on the institutional buying in the last session. The banks $1.92m, company $0.05m and foreigners $0.53 were net buyers. They cherry picked cement, financial and some were accumulating MSCI stocks. The KSE-100 Index closed at 44,337.44. The average volume turnover was 174.66 million shares while market capitalization as on Friday stood at Rs9.109 trillion.

PARTICIPANTS/ACTIVITY

On average shares of 348 companies were traded . Of these 163 were gainers and 171 were losers and 14 remained unchanged.

Foreigners were net buyer of $0.99m during the week; companies were net seller $2.72m, banks were seller $1.18 m; mutual fund net seller$8.32 m and individuals net buyer $27.96m.

Volume leaders during the week were: K-Electric 65m; TRG Pak Ltd 46m; Bank of Punjab 43m; Engro Polymer 21m; Aisha Steel Mills 18m; Summit Bank 14m; Azgard Nine 9m; Silk Bank, Power Cement and Sui Northern Gas 8m each and Sui Southern Gas 6m.

TRIGGERS

– Crucial hearing by Nepra on K-Electric review petition for a multi-year tariff.
– Trade deficit widens by 37 percent to 32.5 billion.
– Weekly inflation down by 0.2 percent.
– CPEC outflows to peak at $4.5 billion by 2024
– Remittances declined 3.08 percent to $19.3 in last fiscal year.
– SECP Chief Zafar Hijazi held a meeting at PSX on Thursday.
– Release of country report by IMF.
– Unchanged credit rating B3 by Moody’s for Pakistan.

CONCLUSIONS

Despite political uncertainty , market has shown sign of recovery in the closing session due to attractive prices of value stocks. Technically the market support and resistance are 43,151 and 44,426.

RAEES UDDIN KHAN – Research & Development Institute of Securities Management & Research Karachi

Check Also

Stock Review

PSX INDEX TAKES BRIEF RESPITE AS POLITICAL ANARCHY LIKELY TO SHUN INVESTORS Political uncertainty negatively …

Leave a Reply