close
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!
 
May 9, 2021

Stocks likely to stay buoyed after long holidays

 
May 9, 2021

Stocks rallied in the week pinning hopes on finance minister’s resolve to focus on economic growth, amid signs the uptrend may endure after the weeklong holidays, dealers said.

Week-on-week Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Shares index gained 2.06 percent or 912.32 points to close the week at 45,174.67 points.

“We expect the market to remain in the green after Eid,” brokerage Arif Habib Limited said in a report.

“Progress on the circular debt clearance plan is likely to keep the energy chain in the limelight.”

“Moreover, after a week of holidays, investors are likely to build new positions where we highlight cyclical sectors to be the most attractive,” the brokerage added.

It further said the recent decline in Covid infection ratio should also help keep sentiment upbeat.

Average daily volume shrank 27 percent to 241 million shares a day from 331 million recorded last week.

Brokerage Pearl Securities in a report said the market moved both ways in the week owing to factors like EU Parliament’s pushing Pakistan to amend certain laws, creating uncertainty among investors, rising Covid-19 third wave, and government signing agreements to procure 30 million doses of Covid vaccine.

KSE-30 shares index gained 2.03 percent or 369.23 points to close at 18,469.87 points.

Foreign buying clocked in at $1.0 million compared to a net sell of $13.1 million last week.

Buying was witnessed in technology and communication ($1.2 million) and cement (0.7 million). On the domestic front, major selling was reported by insurance companies (3.3 million) and banks ($3.1 million).

Ali Zaidi at JS Global Capital said in a major development, the EU Parliament adopted a resolution to review trade relations with Pakistan, “a step that puts into question the continuation of the country's GSP+ status”.

“It is not surprising therefore the textile sector underperformed the benchmark index in the week, and closed in red.”

On the flip side, the power sector outperformed the KSE-100 on reports that the government would clear Rs90 billion of its dues to a number of IPPs (Independent Power Producers), Zaidi said.

The Economic Coordination Committee (ECC) of the Cabinet has approved a payment

of Rd89.86 billion as first installment of 40 percent to 35 IPPs as per an agreement reached with them.

The ECC meeting presided over by Finance Minister Shaukat Tarin was presented a summary by the Power Division regarding release of first installment of payment to the IPPs.

Furthermore, the finance minister has stated that Pakistan would approach the IMF regarding relaxation in some tough conditions. With regards to Covid-19, even though the number of cases in Pakistan has reportedly declined, lockdowns have been announced in Khyber Pakhtunkhwa and Punjab to contain the spread.

It may be mentioned here procurements have been taken to combat the pandemic spread as deals have already been signed for purchasing over 30 million doses of vaccines.

Major events during the outgoing week included April 2021 CPI inflation clocking in at 11.1 percent, trade deficit increasing 21.5 percent to $2.731 billion in April 2021, and Finance Minister Shaukat Tarin statement that Pakistan would not leave the IMF program but try to convince them there was no room for increasing power tariff and taxes.