Pakistan Stock Exchange (PSX) likely to remain positive in upcoming week owing to IMF package approval and appreciation in Pak Rupee value. The market to remain positive in the upcoming week in lieu of the IMF package approval and recent appreciation of PKR against green back which will lift investors sentiments. However, there may be some risks to the index including economic concerns on account of high Current Account Deficit, slowdown in large scale manufacturing and further monetary tightening expected in upcoming monetary policy on the back of tariff hike of utilities (Gas and Electricity) which could trigger inflation noticeably going forward.
This week trading commenced on a positive note as investors rejoiced the 3 day extension in Tax Amnesty Scheme as well as finance bill approval in the parliament. Furthermore, first tranche of the USD 500 million received from Qatar along with loans arranged from syndicated Banks and World Bank aided foreign currency reserves. Tally by the end of first three trading days unveiled a positive run 995 points at the index. However, investors resorted to profit taking post official agreement of the IMF Board for a USD 6 billion package for Pakistan coupled with strike from cement dealers, automobile dealers and closure of textile units on budgetary measures. As a result, the benchmark KSE-100 index closed at 34,190 points, up by 288 points or 0.9 percent WoW.
Contribution to the upside was led by i) Fertilizer (+180 points) amid news of GIDC settlement of up to 50 percent, ii) Commercial Banks (+122 points) given indication of further rate hikes (tight monetary policy) by the IMF, iii) Chemicals (+18 points), iv) Insurance (+14 points), and v) Automobile Assemblers (+13 points).Scrip wise major gainers were FFC (+113 points), HBL (+86 points), NBP (+36 points), ENGRO (+35 points), and EFERT (+31 points). Foreign buying continued this week clocking-in at USD 5.9 million compared to a net buy of USD 7.9 million last week.
Major buying was witnessed in Power Generation & Distribution (USD 3.7 million) and Commercial Banks (USD 1.7 million). On the local front, selling was reported by Insurance Companies (USD 4.6 million) followed by Mutual Funds (USD 2.6 million). That said, average daily volumes for the outgoing week were down by 41 percent to 87 million shares likewise value traded decreased by 29 percent to USD 20 million.