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INDEX POSTS PROFIT AS TRADING ACTIVITY RETURNS TO NORMALCY AFTER PM DISQUALIFICATION
SUMMARY

Pakistan Stock Exchange (PSX) heaves a sigh of relief on Friday as Panama Papers case verdict over Prime Minister Nawaz Sharif puts an end to the uncertainty being hanging in the minds of investors on the way forward for stock exchange. The trading pattern of PSX operations during the week points to the fact that it had already taken into account the anticipated disqualification factor as verdict was expected this week.

The strength of PSX remained intact as during Monday and Tuesday the market showed positivity and gained 235 index close 45,529.21 and 389 points index close 45,917.90. Later on as the time for Panama case decision approached, the market remained flat on Wednesday, Thursday and Friday . KSE-100 Index shed 9 points, closed 45,908.39 on Wednesday and 45,905.76 on Thursday with slight gain of 6 points and close at 45,912.03 on the day of verdict on Friday.

There was wild swing on early Friday, the day of Panama verdict, when a decline of 1669.82 was witnessed. Since the market is already discounted ,the investor took this decline as an opportunity to buy . A complete u-turn in the market happened in the last 30 minutes of Friday to recover all its losses and finally to close flat with gain of 6.27 points.

The individuals were net buyer of $20.99 million on Friday close. The market capitalization rose to Rs9.515 trillion from Rs9.460 trillion on Thursday. The volume too on Friday increased to 328 million shares from 159 million shares a day earlier. Overall the volume this week on average increased to 198 million shares compared to 134 million last week. The KSE-100 Index reached 46,000 i.e. 45,912.03 compared to 45,294.39 last Friday, a gain of 617.64 points.

 

PARTICIPANTS/ACTIVITY

On average shares of 359 companies were traded. Of these 205 were gainers and 138 were losers and 16 remained unchanged.

Foreigners were net seller of $13.11m during the week; companies were net seller $7.59m, banks were buyer $17.67m; mutual funds net seller $28.24m and individuals net buyer $23.83.

Volume leaders during the week were: Azgard Nine 87m; TRG Pak Ltd 76m; Engro Polymer 39m; Bank of Punjab 33m; Aisha Steel Mills 28m; SSGC26m; K-Electric & Dewan Motors 16m each; Dost Steel Mills Ltd 12m; Byco Petroleum 8m and Dewan Cement 7m.

TRIGGERS

– Govt raises Rs54.5 billion against the maturing amount Rs689.5 billion through PIBs against a target Rs100 billion.
– Profit repatriation rose to $2.1 billion in 2016-17.
– Panama case verdict brought about 1.5 percent loss in local currency against the dollar in the open market.
– US will not pay Pakistan’s military reimbursement this week.
– Weekly inflation(SPI) eases slightly by 0.13 percent by July 27.
– Ch. Nisar decision to quit politics a day before the Panama Papers case verdict.

CONCLUSIONS

After the Panama verdict the uncertainty in the market is over. One has to watch closely the aftermath of political development and formation of the government. With the removal of Prime Minister and Finance Minster there could be change in economic priorities of the government for election.

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

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