Weekly Review: Market likely to bounce back on easing Pak-India stand off

KARACHI: After witnessing decline the equity market likely to bounce back during next week after ease in stand off between Pakistan and India.

Analysts at Arif Habib Limited hoped that the market to bounce back next week with tension between India and Pakistan to face a significant suppression following the release of the IAF pilot today.

Enticing valuations of various stocks open up lucrative buying opportunities.

The benchmark KSE-100 index remained in the red this week primarily owing to immense tension between Pakistan and India following the Pulwama attacks.

The intensity of the situation resulted in cross border intrusions by both countries’ respective air forces, and Pakistan arresting one IAF pilot after striking down a fighter jet.

Following intervention of international powers, especially of President Trump, the investor sentiment improved and the market responded positively to the defusing tension towards the end of the week.

The KSE-100 index declined 477 points this week, to close at 39,539 points.

Sector-wise negative contributions came from i) Cements (125 points), ii) Oil & Gas Exploration Companies (70 points), iii) Oil & Gas Marketing Companies (58 points), iv) Commercial Banks (58 points), and v) Power Generation (47 points).

On the flip side, sectors that contributed positively include i) Tobacco (92 points) and ii) Miscellaneous (7 points). Scrip-wise major losers were LUCK (61 points), MCB (54 points), PPL (46 points), NESTLE (33 points) and UBL (30 points).

Foreign selling was witnessed this week clocking-in at USD 1.3 million compared to a net buy of USD 3.5 million last week.

Selling was witnessed in Commercial Banks (USD 1.9 million) and Exploration & Production (USD 0.4 million).

On the domestic front, major buying was reported by Insurance Companies (USD 15.6 million) and Companies (USD 4.7 million).

Volumes during the week settled at 160 million shares (up by 52 percent WoW) whereas value traded arrived at USD 51 million (up by 33 percent WoW).

Other major news: i) Up to 10 percent hike in petroleum prices proposed, ii) RLNG-based power project: Signing of PPA, RA with SNGPL allowed, iii) Singapore offers help in building 5 million low-cost houses, iv) SBP allows Islamic banks to offer refinance.

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