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Stocks slide continued, extend losses below 44,000 level
Summary

Post budget sessions saw PSX dropping 1,005 points. The trend continued on second week as KSE-100 Index shed another 942 points to close below 44,000 level to 43,594.79.

The factors affecting the downward trajectory of the stock slide includes: political uncertainty, concern over approval of pending disputes over budgetary proposals, unattended tax proposals, controversy between government & NAB and poor economic numbers. The average volume this week increased by to 168m but the market capitalization declined below Rs.9 trillion to Rs.8.973 trillion.

The stock market remained highly volatile on Monday. Rising political temperature and poor economic number kept the market down. It shed 158.39 points to close at 44,378.52. The volume too declined to 130.5m shares.

Stock exchange continued declining on Tuesday. Banking sector was the biggest loser erasing 132 points from KSE-100 Index. The Index lost 311.56 points to close at 44,066.96 points.

On Wednesday, the KSE-100 Index touched 43,000 level to drop by 271.96 points to close at 43,795.00 points. The market got affected with the news of potential reduction of Pakistan’s weight in MSCI semi-annual review scheduled for May 14.

There was modest gain after stocks losing 7-day streak. The market gained 60.78 points to close at 43,855.78. Cement sector closed positive after rumors that manufacturers will increase prices by Rs.15 per bag.

Finally on Friday the investors were cautious as different political parties holding election rallies in the city over the week end. The stocks shed 260.99 points to close at 43,594.79.

Participants/Activity

On average shares of 370 companies were traded. Of these 118 were gainers and 233 were losers and 19 remained unchanged.

Foreigners were net buyer of $2.91m during the week; companies were seller by $1.56m, Banks were seller $1.35m; Mutual fund net buyers $4.24m and individuals net seller $1.80m.

Volume leaders during the week were: Unity Foods Ltd 42m; Sui Southern Gas28m; Dawood Investment Bank 25m; Dewan Cement 25m; Fauji Cement XD 21m; Ist Dawood Bank, Trust Investment Bank Ltd18m each; Bank of Punjab 18m; Investment Bank Ltd 10m; Engro Polymer 8m; Engro Fertilizer and Pak Elektron XD 6m each and Azgard Nine 5m.

 

Triggers
  • Pakistan received $16.3 billion remittances in the first ten months of 2017-18, reflecting 3.9 percent increase over the corresponding period of FY17.
  • Exports of merchandise grew of 19 percent year-on-year in April 2018. Despite growth, the trade deficit surged from by 14.4 percent to reach $30.24 billion in 10 months.
  • Automakers fear curb on non-filers to hurt sales.
Conclusions

Technically a fall in Index will take it to 42,823 level while an upside high is 44,139.

 

Raees Uddin Khan,
Research & Development, Institute of Securities Management Research & Training (Pvt) Ltd, Karachi.
Dated: May 12, 2018

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