Shares rise thanks to Saudi aid amid turbulent weekNews
KARACHI: The benchmark index of the Pakistan Stock Exchange (PSX) gained 641 points in the outgoing week to close at 46,219 points, up 1.41% on a weekly basis.
According to AKD Securities, the stock market remained nervous for the first two sessions, dropping 351 points due to uncertainty surrounding the ongoing review of the International Monetary Fund (IMF).
In the third session, however, the stock market rebounded strongly and added 564 points to the news of $ 3 billion of expected inflows from Saudi Arabia. It instilled confidence in investors as they turned bullish. One of the consequences of this news was the appreciation of the value of the local currency against the dollar. The rupee gained 1.4 pc against the greenback in the intraday session to close at Rs 172.6.
In addition, the IMF authorized Pakistan to use $ 2.78 billion to meet the budgetary requirements that the fund had extended to Pakistan to fight Covid-19. This further fueled the positive momentum on the exchange.
However, the average weekly volume remained at 305.96 million shares, down 10.5% from 341.8 million shares a week ago. The brokerage said the drop in volume was due to inefficiencies in the newly implemented trading system at PSX.
Other big events occurred during the week, including Pakistan and Japan agreeing to defer payments on the $ 200 million debt, with urea withdrawals surging 24% year-on-year. another in September, with Qatar deciding to invest in Pakistan’s next LNG terminal, with the Energy division seeking an additional Technical Grant of Rs 134.8 billion to clear the contributions of independent power producers and the budget deficit for July- August amounting to 0.9 pc of GDP.
The best performers in the outgoing week were Packages Ltd, which grew 14.6% week-on-week, followed by Shifa International Hospitals Ltd (12.5%), Pioneer Cement Ltd (10, 8%), International Steels Ltd (10.6%) and International Industries Ltd (10.4 pc).
In terms of flow, “other organizations” remained the top buyers as they posted a net purchase of $ 1.7 million. They were followed by insurance companies with a net purchase of $ 1.32 million. Foreigners stood on the other side with a net sale of $ 2.68 million, followed by individuals who unloaded shares worth $ 1.05 million.
According to Arif Habib Ltd, the stock market is expected to show some positivity in the coming week, thanks to the conclusion of talks with the IMF for the sixth tranche. In addition, Saudi Arabia’s support for safe deposits and the upcoming issuance of sukuk along with the suspension of debt repayment will reduce the pressure on the country’s foreign exchange reserves.
“However, current macroeconomic concerns such as rising imports and higher inflation can keep the market in a range,” he added.
Posted in Dawn, October 31, 2021