The stock market records a record surge



Bulls charged at the Pakistan Stock Exchange in the outgoing week and propelled it higher by the biggest margin in the past two years as market participants widely cheered the end of the protracted political drama with the vote of no confidence that finally took place in parliament last weekend.

Moreover, the continued appreciation of the Pakistani rupee against the US dollar and the receipt of record remittances in March also generated positive sentiments in the local stock market. As a result, the benchmark KSE-100 closed the week with a massive increase of 2,157 points or 4.85% to the 46,602 point level.

“The benchmark KSE-100 index posted the strongest growth in two years on a weekly basis,” said a report from Topline Securities. “This gain can largely be attributed to political uncertainty as Shehbaz Sharif was elected Prime Minister in place of Imran Khan, who was removed from office by a vote of no confidence which finally took place in parliament on Saturday. last,” he added. .

The week started off on a bullish note as the market soared around 1,962 points in the first two sessions of the week.

The benchmark posted the highest-ever single-day gain of 1,700 points on the very first day of the week as outgoing Prime Minister Shehbaz Sharif’s swearing-in ceremony marked an end to the turmoil extended policies.

Market participants welcomed the development with open arms as they speculated that the International Monetary Fund (IMF) lending program might resume soon.

On Wednesday, however, the market witnessed widespread profit taking as investors weighed their feelings on the possibility of Pakistan posting a record budget deficit of 6.4 trillion rupees in 2021-22. As a result, the market fell around 242 points amid volatile trading. The last two days of the outgoing week again saw a reversal in sentiment as the market added 436 cumulative points to end the week in the green zone. Remittances to Pakistan hit a record high of $2.8 billion in March, boosting investor interest and triggering a buying frenzy on the stock market.

The continued appreciation of the local currency against the greenback in the interbank market has largely contributed to the bullish sentiments.

However, a new round of political unrest following nationwide protests against the newly formed government has capped gains on the local stock market.

“We expect the market to remain positive over the coming week,” said a report from Arif Habib Limited.

“With the start of the earnings season and clarity on the political front, certain sectors and certificates should remain in the spotlight,” the report said, adding: “In addition, we expect the renewal of Chinese loans worth $2.3 billion and negotiations with the IMF, which will help strengthen our foreign exchange reserves.

During the week under review, average daily trading volume increased 213% week-over-week to 477 million shares, while average daily value traded fell 135.6% d on a week-to-week basis to reach $66.3 million.

In terms of sectors, positive contributions came from commercial banks (395 points), fertilizers (292 points), technology and communication (268 points), cement (241 points) and refinery (129 points). ).

Conversely, sectors that contributed negatively include real estate investment trusts (2.19 points), vanaspati and related industries (1.55 points).

Meanwhile, positive contributors in terms of scripts were Engro Corporation (152 points), TRG Pakistan (136 points), Meezan Bank Limited (122 points), Habib Bank Limited (85 points) and Systems Limited (80 points).

However, negative contributions came from Colgate-Palmolive (Pakistan) Limited (14 points), Faysal Bank Limited (10.88 points), Fatima Fertilizer Company (4.74 points), Allied Bank Limited (3.18 points) and Dolmen City REIT (2.19 points).

Foreign purchases were seen this week, reaching $1.29 million, compared to a net sale of $3.78 million the previous week. Large purchases were seen in technology ($2.21 million) and fertilizers ($1.16 million).

On the local front, sales were led by mutual funds ($9.89 million), followed by insurance companies ($7.76 million).

Among other major news, SBP reserves fell below $11 billion, banks approved housing loans of Rs 180 billion, PTA renewed mobile operator license for $486 million, car sales jumped 53.78% in nine months, the Rs 1 billion Islamic finance facility for renewable energy power plants and the weekly inflation saw the biggest rise since November.

Published in The Express Tribune, April 17and2022.

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