LAHORE: Pakistan Stock Exchange (PSX) has enjoyed its best week since January 2018, as rupee depreciation coupled with rising international oil prices revitalised investors’ interest. In this backdrop, benchmark KSE 100 index posted strong price performance gaining 3.84 per cent YoY to close the short trading week at 45,030 points, however, a market analyst while talking to Pakistan Today said that a falling rupee should concern investors not boost the market.
A senior market analyst told Pakistan Today, on the basis of anonymity “The rupee depreciation is being portrayed as a positive move for the market, but what people fail to realise is the fact that the currency depreciated almost 10 per cent in less than 4 months. This shows the extreme height of uncertainty in the financial market.”
He added a falling rupee should concern investors. As a result of direct co-relation between the rupee and the financial markets, a weak rupee should drag the market down not boost it. Uncertainty and volatility in the market are both dangerous.
He further went on to say, the falling rupee is highly unlikely to attract foreign investors as to what is being portrayed.
While talking to Pakistan Today, Capital Stake Director Research Maha Jafer Butt said “The market has crossed 45,000 mark in the post-devaluation rally but there are not many big positive triggers. Foreign investors have continued to offload and ended the week as net sellers. Concerns remain over major economic indicators and the political situation is uncertain ahead of elections.
Following rupee devaluation, 4.3 per cent since its last move in December 2017 to settle at 115.57, foreigners came back into action amassing $9.77 million worth of equities in the last trading session only. Meanwhile within the banking sector, Habib Bank Limited (HBL), United Bank Limited (UBL) and Muslim Commercial Bank (MCB) gained 6.4 per cent, 11.01 per cent and 8.9 per cent WoW respectively.
E&P, Power and Textile sector maintained their gains throughout the week becoming key beneficiaries from the rupee scenario. Meanwhile, average trading volumes rose to 192.85 million shares, up 10.29 per cent WoW.
