KARACHI: Following more than a month of stampede that saw
massive bleeding at the stock market, exhausted bears were chased away
in the outgoing week.
The KSE-100 index regained 825
points (2.1 per cent) during the week to settle at 39,471. The index
sank to one-and-a-half-year low, below the 38,000-point level, before
bouncing back in the later part of the week.
The
benchmark is down 8,336 points (17.4pc) from the start of 2017 when it
was at 47,807 points. It has also lost 13,405 points (25.4pc) from the
peak of 52,876 points in May. About Rs1.33 trillion has been wiped off
the PSX market capitalisation since Jan 1.
No stock
analyst suggests that the outgoing week’s performance represents the end
of the bear market. “It could yet be a ‘dead cat bounce’ phenomenon,”
said a pessimist at the market. Investors who had long been in search of
direction found one in the outgoing week as political dust settled to
an extent. The market was flooded with positive news reports, such as
the passage of the Delimitation Bill in the Senate and an improvement in
the civil-military relationship.
Former prime minister
Nawaz Sharif’s announcement that his younger brother would be the
PML-N’s candidate for the premiership in the next general election
dispelled uncertainty on this account.
An over-sold
market along with a couple of steps by the chief regulator to increase
liquidity and a string of bullish 2018 strategy reports also contributed
to improved investor sentiments. Market activity improved slightly with
the average daily volume of 138 million shares, up 2pc from the
preceding week, although the average daily traded value decreased 15pc
to $52m.
Stocks that were lead gainers during the week
and contributed 533 points to the index included United Bank, up 11pc
week-on-week, Habib Bank 7pc, Oil and Gas development Company 3pc, Lucky
Cement 4pc and Engro Corp 3pc. Pakistan Oilfields lost 4pc, Hub Power
3pc, Pakistan Petroleum 2pc, Nestle Pakistan 5pc and Mari Petroleum 3pc,
taking away 170 points from the index. Banking and engineering sectors
were up 5pc. Food stocks were down 3pc, autos 1pc and refineries 1pc.
Foreign
investors eased their selling spree with a slower outflow of $5.4m
during the week against $8.9m in the preceding week. Foreign selling in
cement and textile stocks was $6.5m and $1.1m, respectively. Fertiliser
and oil and gas sectors attracted $3.8m and $1.3m inflows, respectively.
On the local front, individuals were net buyers of stocks valued at
$2m while banks were net sellers of $4.5m.
OUTLOOK: The
prognosis for the upcoming week was the continuation of the bullish
momentum, according to AKD Research. It was thought to be on the back of
renewed optimism on the local bourse based on the apex regulator’s
initiative of increasing the number of companies eligible for the margin
trading system with the introduction of category B, positive
development on the political front and stable international oil prices.
“Moreover, the market may also continue to take its cue from fund
managers’ year-end window dressing ahead of the New Year,” said an
analyst.
Other market pundits cautioned that some correction could not be ruled out as the rollover week was set to begin next Tuesday.
