The Pakistan Stock Exchange (PSX) closed at 44,477 points on Friday down by 395 points compared to the prior week. The PSX saw a slowdown in investor activity as the benchmark index dropped by 0.9% during the week.
JS Global wrote in its research note that the release of Pandora Papers, an alarming increase in the import bill, spiking global commodity prices and the more than expected increase in inflation rates resulted in dampening investor sentiment. It added that the approaching International Monetary Fund (IMF) review also added to the negative investor activity.
In terms of the average daily traded volume, a 25pc week-on-week decline led to 265 million shares. The value of traded shares fell 21pc compared to the prior week and averaged $60 million.
JS Global added, “Mounting coal prices led the cement sector to underperform the benchmark this week. Delays in allocating incentives as per the new refinery policy caused refineries to show lagged performance while rising costs and depreciating rupee continued to pressure automobile stocks.”
The oil and gas exploration sector recorded gains owing to higher global oil prices.
Investors foresee increasing monetary tightening in the future as indicated by the State Bank of Pakistan’s treasury bill auction during the outgoing week. The auction witnessed an increase of 21 basis points (bps) in the cut-off rates. The increase led to the outperformance by the banking sector.
Companies that performed well include Mari Petroleum Ltd, which saw an increase of 14.6pc week-on-week, followed by The Searle Company Ltd (7.8pc), Colgate-Palmolive Pakistan Ltd (6.4pc), United Bank Ltd (5pc) and Millat Tractors Ltd (3.8pc), as per AKD Securities.
On the other hand, poorly performing companies included National Foods Ltd, which saw a drop of 18.9pc on a weekly basis, followed by Pioneer Cement Ltd (11.8pc), Gadoon Textile Mills Ltd (10.8pc), Fauji Fertiliser Bin Qasim Ltd (-10.7pc) and Cherat Cement Company (-10.5pc).
Companies that topped in terms of volume are WorldCall Telecom Ltd (133 million shares), TeleCard Ltd (127.3m shares), Unity Foods Ltd (55.6m shares), Ghani Global Holdings (50.8m shares), and Byco Petroleum Ltd (50.7m shares).
Flow-wise, individuals continued being the major buyers with a net purchase of shares worth $7.13m. Individual investors were followed by mutual funds that purchased $3.61m worth of shares on a net basis. Companies were net sellers of $16.05m scrips. Foreign investors sold shares worth $3.7m on a net basis.
AKD Securities said, “The market direction is likely to be determined by the upcoming result season, geopolitical situation and, most importantly, the IMF review where formal talks are expected to take place in the next week”. It added that the government has formulated strict measures to widen the tax base. Gas and electricity tariff hikes are expected in the upcoming months.