Stocks are likely to remain positive in the near-term as hopes are pinned on positive foreign inflows and political stability in the aftermath of the senate elections, dealers said.
After posting loss for four consecutive weeks, equities returned to positive track by the end of week ended March 2 as investors’ confidence was improved on prospects of timely senate elections, while cement sector garnered investors’ attention on price hike.
“Selling pressure was witnessed in banking sector during the outgoing week owing to confirmation about the inclusion of Pakistan in Financial Action Task Force’s (FATF) grey list in June 2018 that is likely to put tighter conditions on banking transactions,” Topline Securities said in a report.
KSE 100-share Index of Pakistan Stock Exchange gained 1.09 percent or 473.29 points to close the week at 43,740.49 points. KSE 30-share Index gained 1.47 percent or 324.81 points to end at 22,059.24 points. Weakness was evident from decline in participation where traded volumes declined two percent to 181 million shares/day.
Analyst Faizan Ahmed at JS Global said investor sentiments remained mixed during the week on FATF news. “Though authorities are confident that inclusion of Pakistan into the grey list will have minimal impact market participants continued to ponder over likely ramifications of Pakistan’s trade with other countries and impact on various listed sectors.”
Foreign investors offloaded shares worth $11.38 million during the week. A bulk of outflows was attributed to off-market deal in Hub Power as 20.4 million of its shares were sold at two percent discount to the market price. Moreover, volatile international crude oil prices also kept oil and gas exploration and production sector, down one percent, under pressure.
Arif Habib Limited, in a report, said cement sector, up seven percent, helped the index remain positive during the week owing to Rs10/bag price hike by domestic cement manufacturers in the north region and expectation of further price increase.
“Moreover, government showed intentions to clear circular debt issue, which improved investor’s interest in power up two percent and oil marketing sector up one percent,” the brokerage added.
The central bank’s total foreign exchange reserves continued to report a decline during the last week, decreasing $358 million to $12.35 billion. The State Bank of Pakistan also conducted treasury bills auction during the week and it realised Rs319 billion vis-à-vis target of Rs650 billion on account of thin participation.
Apart from this, prices of fuel were raised by Rs2.62-Rs6.28/litre for March and banks' pension case was concluded with no retrospective impact on Habib Bank, Allied Bank and United Bank.