After snapping a three-week winning streak by shedding over 400 points last week, Pakistan Stock Exchange (PSX) seems on a bumpy ride amid rollover week, political uncertainty and the Financial Action Task Force (FATF) plenary session starting from February 21.
Moreover, surging crude oil and commodity prices amid Russia-Ukraine tension, which have rattled the financial and equity markets across the globe, may continue to dent the investors’ confidence. However, strong financial results, Prime Minister Imran Khan’s visit to Moscow and de-escalation in Russia-Ukraine tension may turn around the bourse, which has made gains in nine out of the last 11 weeks.
Pakistan will once again present its case before the FATF when the body holds its plenary session in Paris from 21 February to 4 March 2022. The main effort will be to convince the FATF that it has delivered on all the high-level commitments it had made, not just in terms of tightening the domestic laws and regulations but also in terms of successfully prosecuting and punishing people involved in money laundering and terror financing. If Pakistan is removed from the grey list, this will surely help PSX surpass at least 47,000 points level.
“We expect the market to remain positive in the upcoming week,” said a report by Arif Habib Ltd. “Prime Minister Khan is expected to visit Moscow next week, with agenda of two mega gas pipeline projects in order to cater depleting gas reserves.” The report said the signing of a commercial agreement during this visit can catalyse positive market activities. “Keeping in view the ongoing result season, certain sectors and scrips are expected to stay under the limelight,” it added.
The market commenced on a negative note last week owing to fears of a full-scale military conflict in Eastern Europe along with rising local political temperatures. The sentiment remained subdued after a massive increase in local petroleum prices which raised concerns over inflation. Furthermore, 93 percent year-on-year jump in trade deficit during the first seven months of the current fiscal year also fuelled negativity further. A Topline Securities said the investor participation declined in the market as well, as average daily traded volume dropped 7.7 percent to 191 million shares, while traded value plunged 36 percent to Rs5.2 billion on a week-on-week basis.
Foreign selling clocked in at $1.97 compared to a net sell of $5.9 million last week. Major selling was witnessed in technology ($1.5 million) and commercial banks ($0.5 million). On the local front, buying was reported by banks ($4.9 million) and individuals ($2.4 million).
Sector-wise negative contributions came from commercial banks (88 points), fertilizers (68 points), power generation & distribution (66 points), technology & communication (39 points), and cement (37 points). Major laggard stocks included HUBC (67 points), ENGRO (62 points), MEBL (36 points), SYS (35 points), and DAWH (34 points). Sectors that pushed the index towards north were automobile assemblers (9 points), chemicals (9 points), and oil & gas exploration (5 points). Stocks that underpinned the index included EFERT (55 points), SNGP (24 points), and MTL (22 points).
