ONGOING PANAMA HEARING WEEK KEEPS INVESTORS REMAIN LARGELY SIDELINED
The continuous hearing of Panama Papers case by Supreme Court has the impact of investors to being cautious and in result lower participation at Pakistan Stock Exchange (PSX).The average volume of turnover, which was around average 174 million shares a week earlier dropped to average of 134 million this week. Decision making by stock investors were on hold as each day at Panama case brought new tidings for the investors, which were in uncertain mode. Its finally subside on Friday, last day of week, when Supreme Court decides to reserve the judgment to be announced at future date. It seems that the delay in the announcement may affect the market.
The first day of the week Monday, started on a dull mode with lowest trading activity in almost three years. The average turnover was 75.287 million shares. The call of opposition for Prime Minister to resign build up a hostile investment climate. However an increase in oil prices due to slowdown in the growth of rigs drilling in US ease concerns and E&P sector makes gain. KSE-100 Index gained 185.77 points to close at 44,523.21.
There was a rally on Tuesday at PSX and KSE-100 Index gained 1113.15 points to close above 45 mark at 45,636.36. There was buying across the sectors, which push the Index up. Banks added 228 points, cement 149 points, E&P 145 points and fertilizers 142 points.
The three-day bullish momentum ended on Wednesday when the KSE-100 Index shed 217.65 points to close at 45,418.71. Profit-taking was seen in the market while the market remained volatile and range bound.
The bearish trend continued on Thursday. The economic indicators and concern over Pakistan’s rupee strength continue to drive investor’s sentiment along with on-going Panama Papers case hearing of Finance Minister’s case. The market lost 358.78 point to close KSE-100 Index at 45,059.93 points.
On the last day of week Friday stock recoup losses to the extent of 234.46 to close at 45,294.39. Positivity in the market appeared in afternoon as SC concluded the hearing of the Panama Papers case and reserved its judgment.
On average shares of 360 companies were traded. Of these 198 were gainers and 147 were losers and 15 remained unchanged.
Foreigners were net seller of $1.97m during the week; companies were net seller $2.29m, banks were buyer $0.25m; mutual fund net seller $2.8m and individuals net buyer $5.36m.
Volume leaders during the week were: TRG Pakistan Ltd 53m; Engro Polymer 36m; K-Electric 27m; Aisha Steel Mills Ltd 20m; Azgard Nine & Dewan Motors 19m each; Sui South Gas 16m and Bank of Punjab 3m.
– Monetary Policy announcement on 22nd July.
– Current Account deficit touches record $12.1 billion.
– LSM expanded by 6.3 percent in May.
– Currency dears asked to reduce dollar price. SBP assured currency dealers that the exchange rate will remain stable at the current level.
– June power tariff may be cut by Rs2.13.
– Chinese investors show interest in agri sector to produce silk worms, mulberries and many other agro products.
– Foreign investment hits 8-year high, FDI increased 4.6 percent to $2,41 billion in 2016-17.
– China emerged as top investors in last three years.
The Panama Papers case has concluded for judgment in coming days. The investors will be cautious at current levels due to the rollover week. Volatility is expected in the market due to pending decision on the political matter. The SBP will make monetary policy announcement on Saturday, which is expected to remain same at 5.75 percent.