PSX investors likely to show mixed reaction next week

Pakistan stocks closed to an all-time high during the two-day working week due to Eid holidays, while the next week is likely to show mixed reaction by the investors.

An analyst at Elixir Securities said that the upcoming week is expected to witness dull activity in the absence of any triggers, while some research houses believe the market will carry over the bullish momentum of the passing week.

During the outgoing week, the market witnessed huge activity in small- and mid-cap stocks that resulted in surge of volumes by more than 60 percent to touch the highest volumes since last 11 years on Friday.

The benchmark KSE-100 index saw bearish activity on Thursday that was recovered with a few gains on Friday that resulted in an increase of 0.05 percent, or 23.45 points, during the week to 40,363.68 points against 40,340.23 points last week.

The average traded volume increased by 51 percent to 691 million shares from 457 million shares a day because of investors' interest in small- and mid-cap stocks, while average traded value fell by five percent week-on-week to Rs14 billion.

Foreign Institutional Portfolio Investment (FIPI) recorded an outflow of $5.26 in two days as compared to the outflows of $7.06 million last week.

Stocks in the oil and gas marketing sector witnessed net buying of $0.9 million during the week; net selling of $1.6$ million was seen in cement stocks.

Automobile sector was among the top gainers, up 4.4 percent, after the release of auto numbers for August. This was followed by chemicals and pharmaceuticals, which increased 2.4 percent and 1.4 percent, respectively.

Oil and gas exploration companies and commercial banks were among the losers, as they fell 1.5 percent and 0.8 percent, respectively.

According to an important news of the week, compiled by Topline Securities, Pakistan officially became a signatory of the Organization for Economic Cooperation and Development’s (OECD) Multilateral Convention on Mutual Administrative Assistance in Tax Matters aimed at curbing tax evasion.

Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased 1.17 percent on a weekly basis on September 9

The SBP’s liquid foreign exchange reserves decreased $211 million to $17.8 billion as compared to $18 billion in the previous week.

Remittances by overseas Pakistani workers have shown an increase of 15.3 percent year-on-year to $1.8 billion in August.

In a bid to boost Islamic financing in the country, the central bank amended its regulations to exempt Islamic banks from using interest rate-based benchmarks for some of their financing products.

The SBP said Islamic finance institutions would have to outline alternative pricing mechanism for their finance schemes.

The National Electric Power Regulatory Authority (Nepra) granted generation licence to China Power Hub Generation Company for their 1,320MW (660x2) coal-fired plant to be setup in Hub.

“We believe strong investors' confidence, as evidenced by the market reaching new highs with record volumes, will allow the index to carry forward its momentum during the next week’s trading session,” an analyst at Global Research said.