Stocks edge down after Pak-India tensions


Weekly Roundup

The Pakistan Stock Exchange (PSX) in the outgoing week witnessed massive fluctuations as the news of a possible rise in India-Pakistan border escalations which forced investors to offload their positions. On weekly basis, the Index closed on a negative note after losing 83.6 points, and thrashing the seventh consecutive week successful streak to an end.
The benchmark KSE 100-share Index gained 177.62 points or 0.44 percent on daily basis, closed at 40,832.99 points. Last Friday, the Index closed at 40,916.59 after gaining 184 points or 0.5 percent on a weekly basis. Total 330 companies transacted shares in the Stock Market on Friday, out of which 155 recorded gain and 163 sustained losses whereas the share price of 12 companies remained unchanged.
The three top traded companies were, HASCOLR1 with a volume of 18,563,000 shares and price per share of Rs10.54, FFL with a volume of 14,164,500 shares and price per share of Rs14.79, and UNITY with a volume of 8,733,000 and price per share of Rs14.79. On Monday, bulls lifted the benchmark KSE 100-share Index above the 41,000-point mark with 728.29 points and closed at 41,644.88 points.
However, on Thursday, the stock market lost its upward momentum in the wake of uncertainty linked to the release of the detailed verdict in the high treason case against former military ruler retired Gen Pervez Musharraf, with the KSE-100 index closing 948 points in the red at 40,655. Throughout the day, the Index witnessed fluctuation losing 1,100 points during intraday trading before making a slight recovery before hitting an intraday high of 41,796. On Thursday, the Index started trading at 41,603.71 points and witnessed a bullish session throughout the day before taking a plunge at 2:00pm, just after the detailed verdict was issued.
A total of 169,915,190 shares were traded as compared to the trade of 182,857,290 shares on Wednesday, whereas the value of shares traded during the day stood at Rs9.44 billion as compared to Rs10.3 billion. In total, 361 companies transacted shares in the Stock Market, out of which 34 recorded gain and 310 sustained losses whereas the share price of 17 companies remained unchanged. The three top traded companies were, UNITY with a volume of 26,395,500 shares and price per share of Rs14.70, HASCOLR1 with a volume of 13,217,000 and price per share of Rs11.17, and FFL with a volume of 12,571,000 and price per share of Rs15.29.
On Tuesday, a total of 253,882,830 shares were traded compared to the trade 222,325,260 shares during the previous day, whereas the value of shares traded during the day stood at Rs14.5 billion as compared to Rs11.3 billion on Monday. Analysts were of the view that due to the apparent setting up of a conflict between the government and the judiciary, investors preferred to sell off shares.
They observed slim chances of recovery in the market in the coming days and of the index crossing the 42,000-point barrier before the end of the year, as was earlier expected. Before these uncertainties, the index was last seen trading above 41,000 points in February 2019. So far, the market has regained over 11,000 points after hitting a five-year low at 28,671 points in August 2019. After amassing a run up of 10 per cent in the last month, the KSE100 index traded around the psychological level of 41,000 index points.
Major developments for the earlier week were, firstly, inflow of $1.3 billion from Asian Development Bank (ADB) for budgetary support and to address power sector reforms, secondly, worker remittances during November which stood at $1.8 billion (up 9.4 percent as compared to the same month last year), thirdly, forex reserves reaching $16 billion, up by 0.4 percent on a weekly basis, excluding tranche received from ADB, and fourthly, the latest PIB auction that saw 10-yr PIB cut off below 11 per cent that was last seen in Oct.18.
Improvement on the external front together with stability in the Pakistani Rupee was expected to reassure foreign investors. Meanwhile, inflationary readings are set to touch peak in January 2020 with an imminent interest rate cut to follow, domestic investors remain jubilant as well, he said.
Previously, Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh had said the recent strong performance of Pakistan’s stock market was proof of increasing investor confidence on stabilisation measures” employed by the Pakistan Tehreek-e-Insaf (PTI)-led government. In a tweet, the premier’s aide had stated that the 14.9 per cent gain of the KSE-100 Index in November was the highest one-month return over the past six years. The KSE-100 index is up by 14.9% in November 2019, highest one month return after May 2013. Since 16 August 2019, the index increased by 36.6% 10,500 points.

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