Weekly Review: Equity market’s sentiments high on abolishing of advance tax

KARACHI: The Pakistan Stock Exchange (PSX) to remain positive given some material positive events are expected to take place including Saudi energy minister is arriving in Pakistan tomorrow and expectation to establish largest oil refinery in Pakistan.

 

 

 

“In addition, fulfillment of commitments made by Prime Minister to the members of stock exchange during his visit regarding abolition of advance tax and allowance of capital losses to be carried forward will lift investor sentiment,” analysts at Arif Habib Limited said.

The benchmark KSE-100 closed at 39,049 points, up by 1,502 points or 4.0 percent WoW (this is second highest weekly gain in last twelve months).

This week trading commenced on a positive note and gained over 1,000 points on Monday as the crown prince of United Arab Emirates (UAE) announced a financial support package of $3 billion as well as further plans to provide a $3 billion oil facility.

Furthermore, Financial Action Task Force (FATF) expressed encouraging remarks over Pakistan’s efforts to control money lauding and terror financing which fueled investor’s sentiment. On the other hand, rising international oil prices and enticing valuations attracted market participants to build positions in the E&P sector.

Contribution to the upside was led by i) Oil and Gas Exploration (606 points) due to surge in international oil prices, ii) Commercial Banks (348 points), iii) Fertilizers (252 points) amid news regarding settlement on GIDC matter, iv) Oil and Gas Marketing (103 points), and v) Cements (69 points). Scrip wise major gainers were PPL (259 points), OGDC (169 points), POL (146 points), FFC (121 points) and HBL (118 points). While, sectors that contributed negatively to the index were i) Tobacco (-41 points), ii) Miscellaneous (-29 points) and iii) Chemical (-15 points).

Foreign investors accumulated stocks worth of $0.6 million this week compared to net selling of $ 0.5 million last week. Buying was concentrated in Commercial Banks ($1.7 million), and Cements ($1.2 million). On the local front, Mutual Funds led the bullish sentiments, displaying major buying at the index worth $6.7 million followed by Broker Proprietary ($6.4 million). That said, average daily volumes for the outgoing week were up by 18 percent to 139 million shares likewise value traded jumped by 12 percent to $46 million.

Other major news: i) $3 billion financial assistance sealed as Abu Dhabi Crown Prince meets PM Khan, ii) Trade deficit shrinks by 5 percent in first half of FY19, iii) FATF satisfied with bid to curb money laundering, say officials, iv) SBP reserves decline 3.28 percent, amount to $7.05 billion, v) Remittances rise 10 percent to $10.7 billion in first half of FY19, and iv) Furnace oil based power plants made operational.

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