Wed September 19, 2018
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
Must Read

Business

September 9, 2018

Share

Advertisement

PSX in search of direction as govt drags feet on economic reforms

Stocks lost most of the gains of elections-led rally as government’s promises to fix the economy are yet to translate into concrete actions with the investors eagerly sniffing around attractive valuations, dealers said.

A senior analyst from brokerage BMA Capital Management said investors now intensely focus ‘promised’ economic reforms with curtains drawing on the results season.

“Any further delay or government’s indecisiveness to execute politically unpopular decisions may further drag the index performance and volume,” the analyst said, requesting anonymity.

Stocks remained under pressure during the outgoing week as lack of clarity on economic issues due to delays in key economic decisions turned the market sentiment negative.

The market shed 2.1 percent or 883 points to settle at 40,885 points during the outgoing week, erasing most of the gains made after general elections. It was the first time that the market closed below the 41,000 level.

Foreign selling continued clocking in at $9.9 million compared to $10 million a week ago. Volumes sharply fell 22 percent to 139 million shares, while value was down 36 percent to $39 million on week-on-week basis.

Sector-wise negative contributions came from cement (down 169 points amid weak dispatches and declining prices), fertiliser (falling 140 points), oil and gas exploration (dropping 99 points) and oil and gas marketing (sliding 91 points on decline in sales of petroleum products).

Analyst Amreen Soorani at JS Global Securities said investors will take cautious approach with the new government still settling in to face the looming economic challenges, such as depleting foreign exchange reserves, rising circular debt and widening of current account deficit.

“Still, attractive valuations may revive investors’ interest,” Soorani added.

The market is expected to remain range-bound despite Chinese Foreign Minister Wang Yi was expected to discuss issues of mutual interest, keeping China-Pakistan Economic Corridor projects in view, during his visit.

Arif Habib Limited, in a weekly review, said investors are cautious due to demanding economic decisions, including plans to increase industrial gas prices by 26 percent and withdrawal of subsidies.

The price hike is anticipated to partially ease the gas utilities’ ongoing cash flow constraints, but investor sentiments in Sui Northern and Sui Southern gas companies remained negative.

Sultan Mahmood, analyst at Habib Metro-Finance Securities said the market is in search of direction in the near term and clarity on measures.

“We recommend a cautious stance with exposure limited to high yielding stocks and spare liquidity for value hunting at attractive levels,” Mahmood added.

Advertisement

Comments

Advertisement
Advertisement

Topstory

Opinion

Newspost

Editorial

National

World

Sports

Business

Karachi

Lahore

Islamabad

Peshawar