PSX rebounds after six weeks of losses; rate in focus

KARACHI: Stocks market rebounded more than half a percent after incurring losses for consecutive six weeks with investors now eyeing logical outcome of IMF bailout discussions to take fresh positions, but an expected rate hike might keep them unnerved, dealers said.

A leading equity analyst said investors cheered news that International Monetary Fund’s (IMF) bailout is in final stages with timing and pace of stabilisation policies under discussion. Positive was also a significant decline in current account deficit in February. Resolution of Bahria Town issue linked with Rs460 billion payments also triggered the market sentiments.

But, concerns of an expected hike in the upcoming monetary policy may keep investors on the backseat, another analyst from brokerage Arif Habib said.

“The market is expected to display a mixed trend next week showing a range-bound behaviour,” another analyst said.

Pakistan Stock Exchange’s benchmark KSE 100-share Index increased 225 points or 0.6 percent week- on-week to close at 38,532 points. Volumes during the week settled at 84 million shares, down 10 percent, whereas value traded arrived at $28 million, down 6.6 percent week-on-week.

Sector-wise positive contributions came from commercial banks (278 points), oil and gas exploration companies (149 points) and fertiliser (75 points).

Sectors that negatively contributed to the index included power generation and distribution (126 points), oil and gas marketing companies (39 points) and pharmaceuticals (30 points).

Foreign buying of $3.1 million was witnessed during the week compared to a net selling of $15.6 million last week. Buying was witnessed in commercial banks ($2.9 million) and exploration and production ($1.7 million).

On the domestic front, major selling was reported by insurance companies ($4.8 million) and other organisations ($2.7 million).

Brokerage Topline Securities

said the market started on a positive note due to improved current account numbers and some clarity on

IMF bailout, which led KSE-100

index to increase by 545 points on Monday.

Political noise and lack of triggers, however, kept the index under pressure for the following three trading sessions with negative closing.

BMA Capital management the upcoming week may keep the market under pressure, while the investors are expected to remain focused on the Foreign Action Task Force’s proceedings and progress towards the IMF program.

“The investors are also likely to align positions in the wake of the monetary policy announcement expected by month end,” the brokerage said in a weekly roundup. “We expect a status-quo in the upcoming bi-monthly announcement.”