Stocks moved both ways, end in positive territory with gain of 117 points
Summary
Some progress in IMF matters and FATF which investors are keenly looking for appeared on the economic seen along with SBP policy and growth rate outlook for the economy during the week bring some relief for the market as market moved up and down with these news in the market. There were also some political news like Nawaz Sharif getting 6-week bail and PPP chairman starting political rally ‘Caravan-i-Bhutto‘ on Monday build up political pressure in the country. The collapse across the world market also had its impact on Pakistan Stocks Exchange (PSX).
The PSX went up for three days gaining 932.74 and negative for two days with 815.27 points with an overall gain of 117.47 points during the week. The average volume this week improved to 128m from only 84m previous week. The market capitalization increased by 22 billion to close at Rs.7,868 trillion.
The market on Monday tumbled as a reaction to the collapse of world market. The KSE-100 Index shed 403.21 points to close at 38,128.66. The volume declined to 56 million. There was expectation of SBP policy rate hike of 25-50 basis point to put extra pressure on stock exchange. The international oil price also decline affecting exploration and production sector.
The market on Tuesday improved by 200.47 points on the credit of $2.2 billion from China. The market volume improved to 86 million with index closing at 38,329.13.
On Wednesday with the arrival of IMF delegate created optimism for investors as market jumped to 635 million to close at 38,965.01. The volume too jumped to 229 million.
On Thursday the market took nosedive of 412.06 on the impression created by FATF affiliate not happy with steps to block banned groups funding. The market volume too decline to 132 million and market closed at 38,552.95.
The market on Friday remained choppy on speculation of Monetary Policy being announced after trading hour. Finance Minister statement of possible deal by May gave consolation to investor as market gained 96.39 points to close at 38,649.34.
Participants/Activity
On average shares of 336 companies were traded. Of these 151 were gainers and 163 were losers and 22 remained unchanged.
Foreigners were net seller $0.18m during the week; companies were seller by $4.46m, Banks were buyer $1.48m; Mutual fund net buyer $2.26m and individuals net seller$5.42m.
Volume leaders during the week were: Unity Food (R) 111m; K-Electric Ltd 78m; World Call Tel 33m; Oil and Gas Development 7m; Fauji Cement XD and Aisha Steel Mills Ltd 5m each; Siddique Sons Tin Plate 4m; PIBTL 3m and Bank Alfalah XD 2m.
[ads1]
Triggers
– Country received $2.2 billion Chinese lending for balance of payment support as on March 25 to hit foreign exchange reserves held by SBP to a double-digit mark of $10.67 billion.
– IMF new mission chief Ernesto Ramirez-Rigo arrived in Islamabad and Karachi on March 26-27 and left with statement “Broad government-IMF agreement still elusive.”
– SBP policy rate on Friday hiked to 10.75pc.
– SBP sees FY19 growth slowing to 3.5-4.0pc.
– FATF affiliates arrives on Tuesday for three day talks.
– IMF bailout package likely by Mid May, says Finance Minister Asad Umar and added “IMF will probably demand some major changes in banking structure, which are also the kinds of changes sought by FATF.”
– US economist believed that it could signal global economic slowdown in the next 6-18 months.
– Rupee slide continues. The local currency lost Re 1 against dollar as the greenback traded at Rs,142.30 on Friday.
Conclusion
Technically market index has moved towards 50 DMA at 39,699. Any down side will find support in the range of 38,550-38,760. The RSI and the stochastic Oscillator are trading up supporting a recovery view.
Dated: March 30, 2019