KARACHI: Pakistan Stock Exchange (PSX) during the outgoing week recorded an increase of 2.4 per cent despite starting off on a negative note.
The decline was triggered by bone-dry volumes and lack of clarity on the macroeconomic front, as most investors shied away from taking a fresh exposure.
The market’s recovery was explained by attractive valuation levels that invited cherry picking. The meeting of stockbrokers association with the finance minister that ended on a positive note also helped bring stability in the market. The finance minister promised to resolve the long-standing issues of stockbrokers such as excessive taxes on share transactions and carryover of losses for capital gains tax (CGT) purposes.
The local index mimicked the international equity markets which also witnessed a dicey week. The quarterly results season was in full swing with positive surprises seen in Engro Fertilizer’s stellar earnings and payout, while United Bank Limited unveiled a lower than expected earnings thanks to the higher provisioning expense and pension liability.
Among the cement giants, Cherat Cement reported a dip in earnings upon margin compression in the wake of higher input costs. Steel players remained under pressure with International Steel reporting weaker earnings.
The impact of higher gas prices eroded any positive triggers in the sector. Key data points expected for next week include current account data (CAD) for Sep 18 and textile export figures. With results season in full swing, any positive surprise on the earnings front will likely garner investors’ attention.
The onslaught of two weeks where the index lost more than 3,400 points ended during the outgoing week where the index posted an increase of 912 points or 2.43 per cent to close at 38,430 points.
According to an analyst from Topline Securities, increase in the index was the largest since general elections 2018 (after 11 weeks). During the week, Finance Minister Asad Umer’s comments with regard to approaching the IMF within two months as well as potential funding from other multilateral agencies fueled the investors’ confidence, he added.
