Dull trading as lack of triggers keep volume down; index marginally moves up
Summary
It was lackluster trading week with volume decreasing to 208m from 251m last week. Mostly it was range bound trading as investors kept waiting for the formation of the new Pakistan government, which was denied by the Election Commission as it put on hold the Official Election results. Brewing up in the Index is the outburst for upward climb once the government formation process is complete and economic policies are outlined. The Index is therefore hovering around 40,000 level although technically it can dip up to 32,000 level.
During the week, the KSE-100 Index added 337 points to close at 42,842.18 while the market capitalization moved up to 21 billion to close at Rs.8.765 trillion. The foreigners continued to be net sellers with $38.67m while individual investors showed their loyalty being continuous buyers with $10.79m.
The opening day of the week started on a high note as the KSE-100 Index gained 303 points to close at 42,808.66 points. Sectors which contributed to Index climb was cement 81 points, fertilizer 76 points and banks 46 points. The big news was PTI’s parliamentary committee officially named party chairman Imran Khan as nominee for the next prime minister. The volume dipped to 154m.
On Tuesday, it was a dull trading as the Index dipped 48.53 points to close at 42,760.13. However volume increased to 240 million while the foreigners increased their selling to $3.92m.
Wednesday saw range bound trading as KSE-100 Index shed 28 points to close at 42,731.86m. Notable during the day was brisk trading in OGDC by foreigners who were net sellers by $16.6m. Election Commission put on hold the results of 26 seats including two of the likely prime minister Imran Khan, which made investors skeptical about early formation of the government.
Positivity in the market returned as caretaker PM Nasirul Mulk asked President Mamnoon Hussain to call the meeting of the National Assembly on August 13 where new law makers to take oath of the office. The Index jumped by 192 points to close on 42,842.18. The mutual funds were aggressive buyers with $7.3m.
Stocks ended on last day of the week Friday in a range bound trading. The investors went into wait and see mode for the next week. The KSE-100 Index shed 81.77 points to close at 42,842.18 points. Another reason was mutual funds were not aggressive buyers on Friday like yesterday. The buying by mutual funds was $1.14m.
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Participants/Activity
On average shares of 367 companies were traded. Of these 166 were gainers and 185 were losers and 16 remained unchanged.
Foreigners were net seller $38.67m during the week; companies were seller by $1.25m, Banks were seller $1.03m; Mutual fund net buyer $10.41m and individuals net buyers $10.79m.
Volume leaders during the week were: Lotte Chemical 71m; Pak Elektron 64m; Pak Intl Bulk 24m; Fauji Cement 24m; Unity Foods 20m; Engro Polymer19m; Oil and Gas Dev., Trust Investment Bank, TRG and K-Electric 11m each; Bank of Punjab & Sui Northern Gas 9m each.
Triggers
- The overall sales of locally assembled cars, light commercial vehicles, vans and jeeps grew by nine percent year-on-year to 21,344 units during the first month of this fiscal year.
- Remittances jumps 25 percent in July $1.93 billion compared to 1.54 billion received last July.
- SBP reserves up $19m to $10.369 billion during the week ended on August 3.
Conclusion
Technically 200 DMA provide support at 42,562. Upside it could revisit 42,993. Further it may go up to 43,639. Coming week is beginning of new era for Pakistan Stock Exchange (PSX) as new government will be installed. Major economic policies will unfold, which is interesting to watch as it shall have impact on PSX.
[box type=”note” align=”” class=”” width=””]Raees Uddin Khan,
Research & Development Institute of Securities Management Research & Training (Pvt) Ltd, Karachi.
Dated: August 11, 2018[/box]