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Stocks suffer the loss of 7,832 points by end of Fy 2018-19
Summary

At the end of the fiscal year June 2018-19 the KSE-100 Index was standing at its lowest close after ending the week on Friday June 28, 2019 at 33,901.58. Last fiscal on July 2, 2018 the Index was at 41,734.05, resulting with a loss of 7,832 points during the year and a decline of around 19 percent.

The market during the week remained volatile as heated debate over the passing of 2019-20 budget were carried out in the parliament, which according to the Speaker was the longest in parliament history. The opposition in its All Parties Conference (APC) and other meetings had decided to oppose the Budget. Besides investors were also spooked by the exchange rate uncertainty as it touched the highest in the interbank on Wednesday Rs.162.25 from Rs.157.00 a day earlier. The investors also remained worried for the release of Rs.20 billion market fund for stock exchange; held their breath as IMF executive board is scheduled to meet on July 3 to consider three-year ‘extended fund facility’ of $6 billion for Pakistan and nervousness over the Financial Action Task Force black listing.

KSE-100 Index declines 3.5% WoW to close at 33,901.58. The average volume increased to 146m shares and market capitalization decreased by Rs177 billion to Rs.6.887 trillion. Foreign buying clocked upto $7.93m this week while Mutual Fund remained seller for $14.65m.

On Monday KSE-100 Index declined by 653.30 on budgetary measure requiring the presentation of CNIC for the purchase of cement. The Index closed at 34,471.95. Cement sector loses 106 points.

On Tuesday, there was absence of positive trigger in the market which brought Index by 281.33 to close at 34,190.62

On Wednesday, the Index continued declining. The KSE-100 Index shed 102.06 points to close at 34,088.56 due to heavy selling as volume increased from 145m to 159 m shares.

Volatility in the market continued on Thursday and the Index shed 314.13 points to close at33,774.43 points on concern of inflation with June CPI initial figures at 9.5 percent.

On Friday, the market managed to break the losing streak as sign of passing the budget seemed eminent. The Index gained 127.15 points to close at 33,901.58.

 

Participants/Activity

On average shares of 339 companies were traded. Of these 122 were gainers and 190 were losers and 22 remained unchanged.

Foreigners were net buyer of $7.93m during the week; companies were buyer by $9.44m, Banks were buyer $9.21m; Mutual fund net seller $14.65m and individuals net buyers $4.85m.

Volume leaders during the week were: K-Electric 103m; Silk Bank 38m; Bank of Punjab XD 31m; Maple Leaf 20m; Fauji Fertilizer 18m; Fauji Cement and Pak Elektron 15m each; TRG Pak Ltd 13m; TPG Corp Ltd 6m; Habib Metropolitan 5m and Unity Foods 3m.

Triggers
  • Reserves held by the SBP fell by $322 million to $7.28 billion and commercial bank $7.069 billion on the week ended June 21.
  • SBP discontinues Rs.40,000 prize bonds from June 24 onwards.
  • Repatriation of profits dips 25 percent, dropping by over $560 million during the first eleven months of the current fiscal year FY19.
  • Minimum paid up capital of Rs.35 million requirement date for TREC holders has been extended for 6 months.
  • SECP has taken several measures to revamp the regulatory framework governing mutual fund to ease of doing business.
  • Qatar Emir’s visited Pakistan and decided to inject $3 billion into Pakistan economy.
  • Fitch Solutions predicts Pakistan GDP could further shrink to 2.7 % in FY 20.
  • ECC approved for a 191 % increase in gas prices.
Conclusion

After passing the budget its implementation and further movement on economic matters is to be seen vis-à-vis Amnesty scheme, the IMF July 3 decision, the FATF matter in October and fate of stock market fund.

Technically the downward trend of Index could lead to 32,876 while an upward index could touch 34,187.

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