PSX begins 2022 higher as investors’ fish for oversold stocks
Pakistan Stock Exchange (PSX) started 2022 trading on a strong note on Monday, as investors picked up stocks that were oversold during the previous week, with hopes for a positive review from IMF on loan programme continuing to underpin quiet market.
The PSX’s benchmark KSE-100 index gained 290.82 points or 0.65 percent to settle at 44,886.89 points compared to 44,596.07 points in the last trading session. “Stocks closed bullish led by oil and banking scrips on surging global crude oil prices and bond yields,” said analyst Ahsan Mehanti of Arif Habib Commodities in a post-market note.
Mehanti also attributed the bullish trend to strong rupee recovery and surging exports data for December 2021.
Dealers said despite positive closing of the bourse on the first trading day, market had lackluster activity in terms of volumes as total turnover fell to 195 million shares compare to 317 million shares in the previous session.
Trading value also nosedived to Rs6.5 billion compared to Rs10.8 billion in the previous session whereas market capitalization jumped to Rs7.7 trillion compared to Rs7.6 trillion.
Arif Habib Limited (AHL) in its report commented that the market closed in the green zone as trade deficit declined to $4.1 billion during December 2021 and recovery in local currency against dollar over last week.
“The market opened with low volumes but rally in cement stocks was initiated as international coal prices dropped for the third consecutive session,” it added.
In the last trading hour, across the board buying was witnessed mainly in cyclical stocks. Activity continued to remain side-ways as market witnessed hefty volumes in the third tier stocks, AHL said.
The stocks that contributed significantly to the volumes include PIBTL, TPLP, GGL, FNEL and CNERGY.
Darson Securities in its research report said that Federal Board of Revenue (FBR) collection jumped 32 percent to Rs2.92 trillion in the first half of current fiscal and trade deficit declined by 17 percent month-on-month to $4.14 billion in December 2021 gave boost to the market.
It said the benchmark index opened negative, downhill 86.50 points to touch an intra-day low of 44,509.57 levels, later in the day it began to ascend and ended up 290.82 points.
The KSE-All Share trading activity descended as compared to the last trading session as the ready market volume stood at 195 million shares a s compared to the last trading session of 316 million shares. Whist PIBTL contributed most of the volume followed by TPLP.
JS Market wrap pointed out that benchmark index started the new year on a positive note and closed in green zone at 44,887, gaining 291 points.
Market volumes remained thin with total traded volume clocking in at 195 million shares, it said. The brokerage expects the market to pick up pace and recommend investors to avail any dips to accumulate technology, textile and oil and gas exploration stocks.
Stock market posted a meager return of 2 percent in the calendar year 2021 while in dollar terms, the market tumbled by 8 percent, compared to average return of 10 percent during the last 10 years.
After posting 8 percent return in in the first half of 2021, the benchmark index plunged by 6 percent amid widening twin deficits due to record increase in global commodity prices translating into inflationary pressures.
CY2021 performance also remained dismal compared to last 10-year average return of 17 percent while relative to last five years, the return was almost at par.
