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Political hiccups mar rally at stock market

– Pakistan Stock Market received fresh pruning during the outgoing week and index reached to 10-month low mark with foreign selling witnessed in small volumes.

Weak sentiments persist at the bourse with the KSE-100 index shedding another 1.0 percent or 437 points in the outgoing week mainly owing to recent comment of United States President over Pakistan.

Participation remained on par with last week as volumes averaged 180 million shares per day while Rs 9.7 billion or 92 million dollars of equities 92mn exchanged hands.

During the outgoing week Trumps comments on Pakistan relations, domestic politics and concerns over the country’s current account and dwindling reserves derailed the index to an intraday low of 41,063 points, a level last seen on first of November 2016. Earnings have failed to spur interest, most being inline or missing while beats have been due to one-offs or reversals.

Sector plays were reactionary to suggestions for economic stability; Cements tanked seven percent on week on week basis as concerns on price competition weighed heavy, OMCs shed three percent likely on the notion that reducing POL consumption/imports may arrest the sliding deficit.

Banks were the largest domestic buyers, purchasing shares worth 12.5 million dollars, while Foreigners sold equities amounting to 9.8 million dollars during the period under review.

According to the report of BMA Capital Management giving outlook, they said that trading days in the next week will be cut short to four sessions owing to Eid Holidays.

“We see limited market activity given lack of triggers amid continued political uncertainty”, the research house said. Market may continue its search for a bottom amid incessant foreign selling and futures roll-over due next week while result season has not much to offer.

We expect activity to pick-up post Eid, where fresh money injection could be witnessed as investors eye the developments on both political and economic fronts. Key events to watch out for include CPI announcement for Aug’17, progress on government’s plans on bond issue and clarity on government’s response on recent statement by the US President.

(Story by Haris Zamir)

 

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