Investors upbeat ahead of MSCI review

Investors are upbeat on the prospect of Pakistan Stock Exchange’s (PSX) upgrade in the Morgan Stanley Capital International’s Index in May, but Panama fallouts are still keeping them on tenterhooks, analysts said.

“Investors’ interest is expected to pick up ahead of the MSCI review on May 15; however progress on joint investigation team formed by the Supreme Court (to probe Panama leaks) will also remain a key driver of the market performance going forward,” Faizan Ahmed, an analyst at JS Global said.

In June, the US equity indexes said PSX would be reclassified to the emerging market status, coinciding with its May 2017 semi-annual index review.

Stocks edged lower 0.8 percent during the week, ended April 28 due to foreign selling and depressed global crude prices.

“Investors looked to close up shop and book gains ahead of the long weekend as post-Panama excitement faded and triggers dried up amid, barring autos, the dull earnings season,” Adnan Sami, an analyst at Topline Securities.

The KSE 100-share Index of PSX lost 0.82 percent or 407.75 points during the week to close at 49,300.90 points. KSE 30-share Index shed 1.69 percent or 449.35 points to end at 26,004.58 points.

Ahmed said outgoing week witnessed profit-taking as investors were reluctant to take position amid growing political uncertainty.

Participation, however, remained buoyant as average daily volumes continued to trend up 29 percent to 359 million shares/day.  

Foreigners were sellers of $10.7 million worth of equities during the week as against $32 million last week. Most of the selling was concentrated in cement, oil marketing companies and exploration and production sectors.

Mutual funds again turned out to be the largest buyer of equities with net buying of $19.2 million as compared to last week's massive buying of $78 million.

“The index lost its momentum in the current week as results announced by companies failed to excite investors,” BIPL Securities said in a report.

“Furthermore, political uncertainty still steaming in the background kept investors at bay.”

Oil and gas sector losing 4.0 percent, cements shedding 1.0 percent and fertiliser down 4.0 percent remained major underperformers during the outgoing week.

Auto sector surging 10 percent, glass and ceramics rising 9.0 percent, refineries up 2.0 percent and chemical increasing 2.0 percent were the noteworthy contributors.

The country’s total liquid foreign exchange reserves stood at $21.2 billion as on April 21 compared with $21.6 billion a week earlier.