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PSX kicks off 2019 on a positive note as index gains 1% wow
Summary

The working of Pakistan Stock Exchange was pathetic during 2018. KSE-100 Index dropped by 8.4% or 3404 points during the year. Average trading volume declined to five-year low of 185 million in 2018; lower by 22% compared to 2017. Market capitalization plunged by $22.2 billion or 29% to $55.4 billion.

The beginning of the new year 2019 is encouraging as KSE-100 Index gained 380.47 points after last two bearish weeks of December in which it lost 1418.64 points. The average volume increased to 126m compared to 110m last week.

The last day of the year 2018 on Monday was a volatile day for stock exchange. The political temperature was high between PPP and PTI on account of visit of Federal Information Minister to Karachi on the matter of fake accounts and ECL list. The Index shed 100.35 points to close year end 2018 in red at 37,066.67.

The new year on Tuesday was welcome by stocks on the news of China promising to lend $2 billion to Pakistan for exchange reserve. The increase international oil price also helped Exploration & Production stocks regain the Index by 929.10 points to close KSE-100 Index at 37,995.77. Volume, however, declined from 226 million to 97 million on Tuesday.

It was again a volatile day for the stock on Wednesday where it touched high of 38,449 to a low of 37,710 to close at 37,795.25. The investors seem to perturbed by lack of clarity on minibudget and IMF deal.

The market remained subdued on Thursday to shed 254.4 points to close at 37,542.01. The volume too declined to 68 million from 134m a day earlier.

It was a range bound market on Friday and finally it closed with minor gain of 5.48 to end the Index at 37,547.49

 

Participants/Activity

On average shares of 331 companies were traded. Of these 144 were gainers and 167 were losers and 20 remained unchanged.

Foreigners were net seller $0.97m during the week; companies were buyer by $3.51m, Banks were buyer $3.21m; Mutual fund net buyer $13.35m and individuals net seller $2.93m.

Volume leaders during the week were: TRG Pak Ltd 34m; Pak Electron 28m; K-Electric Ltd 24m; Silk Bank Ltd 23m; Lotte Chemical Ltd 15m; Sui Southern Gas Ltd 15m; Bank of Punjab 14m; United Bank Ltd 13m; Bank Al Falah 12m; Fauji Cement 6m; Descon Oxychem, Kohinoor Industries and Hum Network 3m and Dewan Cement 2m.

Triggers
  • Reserves held by the State Bank of Pakistan decreased by $170 million to $7.288 billion on account of external debt servicing and other official payment during the week ended on Dec 28. Holdings of commercial Banks recorded at $6.55 billion.
  • Pakistan will receive another $1 billion from Saudi Arabia in the on-going month. UAE has committed $3 billion, a part of which will be received in couple of days. China has also promised to lend $2 billion for reserve management.
  • SBP has allowed advance payments upto $10,000 per invoice on behalf of importers cum exporters.
  • Inflation eases to 6.2 percent in December 2018.
  • Suzuki announces fresh hike in prices for motorbikes and four wheelers.
  • The Central Directorate of National Savings Schemes increases profit margin by up to 2.74 percent effective from January 1, 2019.
Conclusion

Technically any upside will face a resistance in the range of 37,610-37,930. Above it can go upto 38,872. Downward range is 36,805-36,209.

Some of the brokerage firms have predicted index to go upto 47,000 or 45,220 level by Dec 2019

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