PSX closes week on bearish note, sheds 400 points

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  • Inflows of $1.6m during the week depicted muted foreign interest while average daily turnover stood at 125m, down 34.7pc WoW
  • Investors adviced to keep a close eye on the rising geopolitical tensions as any escalation could take a toll on the market

KARACHI: Continuing from the close of last week, the KSE 100 index started the week on a negative note and followed the trajectory right through, ending at 40,487 points, down -1pc.

Even the finance minister’s hint regarding the International Monetary Fund (IMF) bailout could not cheer the Pakistan Stock Exchange (PSX) investors as they preferred to book profits after the index posting an increase of 10pc in Jan.

Declining coal prices (down 11pc since the start of Dec 2018) invigorated euphoria among the cement stocks during the early part of the week, however, some selling was witnessed in the latter half as profit taking took effect.

Inflows of $1.6 million depicted muted foreign interest while the average daily turnover stood at 125 million, down 34.7pc WoW.

Key developments that impacted the market during the week included the government reportedly deciding to take up to $6 billion loan from the International Monetary Fund, Pakistan and Saudi Arabia likely to ink three major memorandums of understanding (MoUs) amounting to over $10 billion during the upcoming visit of Saudi crown prince, exports during the seven months of FY19 witnessing an increase of 2.24pc to $13.2 billion,  Moody’s Investors Services changing its outlook for the banking system in Pakistan to negative (B3 negative) from stable, and Taliban saying that their negotiators would meet US envoys for talks this month in Islamabad, and will also sit down with Prime Minister Imran Khan to discuss Afghanistan.

Key performers over the week included Cherat Cement Company Ltd (CHCC +5.36pc WoW), DG Khan Cement Company Limited (DGKCC +5.01pc), K-Electric Limited KEL (+2.35pc), KOT Addu Power Company Ltd (KAPCO +2.29pc) and Oil and Gas Development Company OGDC (+1.74pc).

On the other hand, laggards included Pak Suzuki Motor Company Limited (PSMC -7.02pc), Pakistan State Oil (PSO -7.02pc), Habib Bank Limited (HBL -3.29pc), Attock Petroleum Limited (APL -2.95pc) and Engro Foods Ltd (EFOODS -2.91pc).

Analysts believe that the upcoming visit of the Saudi crown prince is expected to keep the investors excited for the week as major investment deals are expected to be signed.

Moreover, they said the continuation of result season would also keep the activity uplifted in selected stocks, adding that some blue chips like PSO, UBL, MCB and ENGRO are expected to announce their results.

Nevertheless, the analysts adviced the investors to keep a close eye on the rising geopolitical tensions as any escalation can take a toll on the market.

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