Shares gain 757 points in nervous week

KARACHI: Trading on the Pakistan Stock Exchange (PSX) started negative last week. Investors reacted poorly to uncertainty about the outcome of Pakistan’s talks with the International Monetary Fund (IMF).

According to Arif Habib Ltd, a large increase in oil prices also raised concerns about rising inflation. However, investor sentiment changed once the prime minister’s financial adviser told the press that talks with the IMF were moving in the right direction and that a staff-level deal was expected soon.

In other news, the central bank reported that the current account deficit fell 24.5 percent month-on-month to $1.1 billion for September, fueling positive momentum. In addition, a continued decline in the rupee-dollar parity to Rs 174, along with an 8 percent weekly cut in the central bank’s reserves to $17.5 billion, kept the index in check.

As a result, the PSX benchmark closed at 45,578 points, a gain of 757 points or 1.7 pc. compared to a week ago.

According to AKD Securities, commercial banks remained among the best performing this week. Rising inflation and a falling exchange rate raised investor expectations of an interest rate hike. Three-month Treasury bond yields also rose 40 basis points in the last auction, which also meant that the market was anticipating a rise in the benchmark interest rate.

Rising oil prices due to a global energy crisis fueled the oil and gas exploration sector, with an average increase of 2.1 pc. during the week.

One of the main beneficiaries of a declining exchange rate was the textile sector. It posted a return of 2.7 pc. on a weekly basis.

Foreigners remained on the selling side during the week, posting net sales of $12.8 million. Much of this sale was absorbed by the insurance industry, which made a net purchase of $6.49 million.

The average daily traded volume during the outgoing week fell by 10.5 pc. on a weekly basis to 306 million shares.

Winners were Adamjee Insurance Company Ltd, which rose 13.6 percent over the week, followed by United Bank Ltd (9.8 percent), Kohat Cement Company Ltd (9.8 percent), Engro Polymer and Chemicals Ltd (9.8%). percent) and Habib Bank Ltd. (9pcs).

Laggards were Millat Tractors Ltd, which fell 18.8 percent in the past week, followed by JDW Sugar Mills (9.2 percent), Ghani Glass Ltd (8.1 percent), Honda Atlas Cars Company Ltd (7.8 percent) and Kot Addu Power Company Ltd (7.7 st).

Arif Habib Ltd said it expects the stock market to remain positive in the coming week. “As the IMF and Pakistan are expected to reach an agreement shortly, investor sentiment is expected to remain positive,” it added.

Published in Dawn, October 24, 2021