Value hunters likely to cherry pick shares post-Eid recess

Value hunters are expected to cherry pick stocks post-Eid holidays given the recent correction in the Index names, while investors are keeping an eye on Panama fallouts to make a decision.

Pakistan Stock Exchange (PSX) will resume operation for possibly two days next week after Eid-ul-Fitre vacation. The joint investigation team (JIT), formed to probe into money trails of Prime Minister Nawaz Sharif’s and his family’s properties, is expected to finish its investigation by 10 July.   

PSX witnessed a highly volatile week ended June 22 wherein the Index remained under pressure due to political uncertainty over JIT and redemptions by mutual funds.

The KSE 100-share Index of PSX shed 1.12 percent or 526.25 points to close the week at 46,332.31 points. KSE 30-share Index fell 0.58 percent or 141.21 points to end at 24,176.05 points.

 “Speculation over outcome of joint investigation team’s findings on Sharif family case continued to air firestorm,” said Faizan Ahmed, an analyst at JS Global Capital.

Market remained volatile during the week as it routed 1,944 points, led by foreign selling in the first two days of the week, while recovering 1,418 points in the following days owing to foreign interest.

Overall activity also improved during the week with an average volume clocking in at 277 million, up eight percent. Foreign investors indulged in buying spree this week, scooping up value buys amidst relentless selling. Overall foreign portfolio investment, during the week, stood at $9.2 million as against $9.5 million of net selling recorded in the last week.

Adnan Sami, an analyst at Topline Securities said after bleeding out 5.4 percent the previous week, the index managed to plug some holes, albeit shedding points.

“Equities were hammered in the first two trading sessions as domestic politics took centre stage, while declining oil prices also added pressure,” Sami added.  Power and textile sectors gained one to two percent, while auto assemblers shed four percent, auto parts and pharmaceutical fell three percent and exploration and production sector and banks inched down one percent each.  KSE-100 index was driven down, primarily by Habib Bank (down 86 points), SEARL (dropping 46 points), Pakistan Petroleum (dipping 46 points) and Fauji Fertilizer (decreasing 44 points), whereas positive contribution came from Hub Power (up 68 points), United Bank (increasing 45 points), Nishat Mills (climbing 41 points), Engro (jumping 17 points) and Lucky Cement (rising 16 points).

Economic developments also affected market’s sentiments during the outgoing week. Foreign direct investment was up 22 percent to two billion dollars in 11 months. The government imposed 24.04 percent anti-dumping duty on Chinese continuous casting billets. Textile export declined 12 percent in May. Current account deficit swelled to $8.9 billion in 11 months, while large scale manufacturing increased 5.6 percent in 10 months of the fiscal year.