Market rises 2.4pc after starting off at a negative note
Last updated on: 20 October,2018 07:23 pm
Onslaught of two weeks where index lost more than 3400 points ended during the outgoing week
KARACHI (Dunya News) – Pakistan Stock Exchange PSX-100 index after election, during week recorded increase of 2.4percent after the index witnessed a choppy ride during the outgoing week, starting off at a negative note but later recovering to recoup most of the losses.
The decline was triggered by lack of clarity on the macro-economic front and bone dry volumes as most investors shied away from taking fresh exposure.
The market’s recovery was explained by attractive valuation levels that invited cherry picking, meeting of stock brokers association with the finance minister, which ended on a positive note with promises to resolve long standing issues such as excessive taxes on share transactions and carry-over of losses for CGT purposes.
The local index also mimicked moves internationally across equity markets which also witnessed a dicey week. Locally the quarterly results season was in full swing with positive surprises seen in Engro Fertilizer’s stellar earnings and payout, while UBL unveiled lower than expected earnings thanks to higher provisioning expense and pension liability.
Amongst the cement names Cherat Cement reported a dip in earnings upon margin compression in the wake of weakened pricing power and higher input costs. Steel plays including International Steel were under pressure as the company reported 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 investor s attention.
Onslaught of two weeks where index lost more than 3400 points ended during the outgoing week where the index post an increase of 912 points or 2.43 percent to close at 38430 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 regarding entry into an IMF program within two months as well as potential funding from other multilateral agencies, fueled Investors’ confidence.