KARACHI: Bears dominated the roost on the inventory market within the outgoing week knocking off the KSE-100 index by 634 factors (1.6 per cent) with closing seen at 40,164.
Investor participation remained weak as a result of lack of buying and selling curiosity because the rising noise on the political entrance stored the market nervous.
The fixed risk of a breakout of the second wave of Covid-19 and its penalties on financial system, already seen by the nation in March, additionally spooked buyers. Different negatives that stored the buyers away included the uncertainty over the Monetary Motion Process Power (FATF).
The Asia Pacific Group (AGP) — a regional affiliate of the FATF — stored Pakistan on its enhanced follow-up listing primarily based on the nation’s efficiency till February. Out of the entire 40, Pakistan was said to be largely compliant on eight, partially compliant with twenty-eight, and non-compliant with 4 FATF suggestions. The ultimate determination of the assembly could be introduced on October 21-22.
Furthermore, higher-than-expected numbers for September inflation, which put a query mark on the State Financial institution of Pakistan’s (SBP) coverage charge going ahead was a dampener on investor sentiments.
The one silver lining was the beginning of the company outcomes season with monetary sector turning out to the harbinger of excellent information with a few banks and funding firms arising with splendid monetary figures.
Foreigners recognized to shun uncertainties continued to ditch shares. Within the outgoing week, they bought shares value $2.7 million. The outflow was primarily seen in exploration and manufacturing sector at $2.8m and cement $0.8m.
Amongst native contributors, banks/DFIs stood out as main consumers of shares valued at $7.6m adopted by the insurance coverage firms $2.4m. Common every day traded worth of shares plunged 24computer over the earlier week to $61m whereas the typical every day traded volumes declined 29computer week-on-week to 296m shares.
Different key developments in the course of the week had been remittances remaining at above the $2 billion stage for the fourth consecutive month in September, representing development of 31computer yr on yr. The rise nevertheless remained a topic of debate relating to how a lot of it represented severance packages of staff as lack of jobs within the UAE was excessive.
Overseas alternate reserves held by the SBP fell for the fourth week on account of debt servicing that rose to $11.8bn. The International Monetary Fund forecasts 1pc development in FY21 for Pakistan, which additionally frightened economists.
In response to Arif Habib Ltd, sector-wise damaging contributions got here from oil and fuel exploration firms, down 21 factors, cement 116 factors, energy era and distribution, oil and fuel advertising and marketing firms 56 factors and know-how and communication 51 factors.
Alternatively, optimistic contributions had been led by chemical, up 16 factors and industrial banks 10 factors. Scrip-wise, prime damaging contributors had been Hub Energy that misplaced 69 factors; Pakistan Petroleum 68 factors and Oil Gasoline Improvement Firm down 63 factors.
Going ahead, the developments on the political entrance with the rise in antagonism between the federal government and the opposition after the Friday rally may move on to buyers — each overseas and native, as a key concern.
Additional, the figures of Covid-19 could be carefully watched for concern of an initiation of lock down. Within the upcoming week, the main information would even be the T-bill public sale scheduled for October 21 wherein the federal government plans to borrow Rs350bn towards the maturity of Rs485bn. Market pundits say that the accumulating positions on dips would be the greatest technique for the fairness buyers going ahead.
Revealed in Daybreak, October 18th, 2020