A weekly review: Stock market observe dramatic fluctuations

Yesterday, the KSE-100 index closed in the red by 279.26 points.

KARACHI (Dunya News) – The Pakistan Stock Exchange (PSX) in the outgoing week witnessed massive fluctuations as the week began on a negative note on Monday when the KSE-100 share Index plunged by 824.70 points for profit-taking sessions before Christmas holiday amid absence of positive triggers but later on Thursday gained 799.47 points amid positive sentiments among traders.

On weekly basis, the Index, on Friday, closed on a little bit positive note after obtaining 16.53 points as compared to previous Friday.

Yesterday, the stock market went into profit-booking and the KSE-100 index closed in the red by 279.26 points at 40,848.53. Mainly oil and gas marketing companies, exploration and production, power and cement sectors remained under pressure. The volume increased 12pc to 267.6m shares, from 236.8m. Technology sector led the volumes with 49.2m shares.

Automobile, financial and exploration and production sectors sparked selling pressure and most of the stocks in these sectors recorded losses. At close, the benchmark KSE 100-share Index recorded a decrease of 279.26 points, or 0.68%, to settle at 40,848.53. HBL (-0.9%), MCB (-1.1%), Oil and Gas Development Company (-1.6%), Dawood Hercules (-2.2%), Fauji Fertiliser (-1.6%), Bank AL Habib (-1.1%), Engro Fertilisers (-0.8%) and Lucky Cement (-0.9%) contributed to the negative close. Traded value stood at $61 million, up 19% and volume came in at 267 million shares, up 13%.

Mainly oil and gas marketing companies, exploration and production, power and cement sectors remained under pressure. The volume increased 12pc to 267.6m shares, from 236.8m. Technology sector led the volumes with 49.2m shares. Traded value increased by 19pc to reach $61.2m as against $51.3m. Stocks that contributed significantly include Worldcall Telecom, Unity Foods, Hascol (right issue), Maple Leaf Cement and Fauji Foods, which formed 39pc of total turnover.

Yesterday, foreign investors sold stocks of $0.57m. Overall, trading volumes increased to 267.6 million shares compared with Thursday’s tally of 236.8 million. The value of shares traded during the day was Rs9.49 billion.

Analysts had previously termed the outgoing week as a rollover week when investors would offload stocks bought earlier at attractive valuations. In addition to this, absence of positive triggers to guide market’s direction also weighed on investor sentiment and spread pessimism for the rest of the day.

On Thursday, the stocks witnessed a bullish trend as KSE-100 Index jumped by 799.47 points (1.94%) – from 40,328 points to 41,127 since the previous working day (Tuesday as Wednesday was Christmas holiday). A total of 132,017,420 shares worth Rs6.52 billion were traded against 135,300,750 shares of Rs7.16 billion during the last trading day.

Shares of 359 companies were transacted, out of which 258 recorded gains and 84 sustained losses, whereas the share price of 17 remained unchanged. The top three traded companies were, UNITY, with a volume of 27,199,500 shares with a Rs15.97 price per share, WTL, with a volume of 21,015,000 shares with Rs1.27 as the price per share, and HASCOLR1, with a volume of 17,767,500 and price per share of Rs9.54.

On Tuesday, the Index plunged to intraday low by 504 points, before recovering to 40,354.33 points, and then closed at 40,328.32 points with a positive change of 320.03 points as compared to Monday’s 40,008.29.

On Monday, the market began in a glum mood in the face of internal and external headwinds, and the PSX saw a virtual bloodbath on Monday when the KSE-100 index went down by 824.70 points to close at 40,008.29 points. The Index traded in a range of 907.54 points or 2.22 percent of previous close, showing an intraday high of 40,839.42 and a low of 39,931.88.

Of the 91 traded companies in the KSE100 Index 6 closed up 84 closed down, while 1 remained unchanged. Total volume traded for the index was 104.29 million shares. All share volume decreased by 1.61 million to 179.10 million shares, and Market Cap decreased by Rs.126.13 billion.

Previous week saw political uncertainties after the detailed judgement in the high treason case against former president Musharraf was issued by a special court, coupled with the news of a possible rise in India-Pakistan border escalations which forced investors to offload their positions.

Analysts had stated that one of the important factors which added more turbulence towards the red index was Indian and Pakistani troops exchanging fire in some areas along the restive Line of Control (LoC) in the disputed Himalayan region of Kashmir.

"Negative sentiments were witnessed across the board," a report of Topline Securities had stated for Monday’s sharp decline of 824 points in the stock market to close at 40,008, down 2 percent, adding the benchmark index had barely managed to maintain the 40,000-points level as the rollover week had started.

Analysts had stated that the bearish trend continued with full force on the back of multiple factors, including profit taking by both local and foreign investors.

They had observed slim chances of recovery in the market in the coming days and of the index crossing the 42,000-point barrier before the end of the year, as was earlier expected.

Before these uncertainties, the index was last seen trading above 41,000 points in February 2019. So far, the market has regained over 11,000 points after hitting a five-year low at 28,671 points in August 2019.

After amassing a run up of 10 per cent in the last month, the KSE100 index traded around the psychological level of 41,000 index points.

Major developments earlier were, firstly, inflow of $1.3 billion from Asian Development Bank (ADB) for budgetary support and to address power sector reforms, secondly, worker remittances during November which stood at $1.8 billion (up 9.4 percent as compared to the same month last year), thirdly, forex reserves reaching $16 billion, up by 0.4 percent on a weekly basis, excluding tranche received from ADB, and fourthly, the latest PIB auction that saw 10-yr PIB cut off below 11 per cent that was last seen in Oct.18.

Improvement on the external front together with stability in the Pakistani Rupee was expected to reassure foreign investors.

Meanwhile, inflationary readings are set to touch peak in January 2020 with an imminent interest rate cut to follow, domestic investors remain jubilant as well, he said.

Previously, Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh had said the recent strong performance of Pakistan’s stock market was proof of “increasing investor confidence on stabilisation measures” employed by the Pakistan Tehreek-e-Insaf (PTI)-led government.

In a tweet, the premier’s aide had stated that the 14.9 per cent gain of the KSE-100 Index in November was the highest one-month return over the past six years.

“The KSE-100 index is up by 14.9% in November 2019, highest one month return after May 2013. Since 16 August 2019, the index increased by 36.6% (10,500 points),” said Mr Shaikh.