Weekly Review: market to stay range bound

KARACHI: The equity market to stay range bound during next week after end of results season and ease in tension between Pakistan and India.

Analysts at Arif Habib Limited said that despite reduction of noise from our Eastern neighbour, investors are likely to take a cautious approach.

Whereas conclusion of result season could also keep the market range bound.

They highlighted that any clarity regarding a potential IMF program can be a positive trigger for the index. The analyst advised investors to go long and focus on value buying.

The KSE-100 index mostly remained in the red territory throughout the week amid spillover effect from last week’s confrontation between Pakistan and India.

Though the de-escalation process started last week with Pakistan offering to help India with investigation, investors remained skeptical.

Furthermore, lack of positive triggers kept the sentiment lacklustre.

Meanwhile approval of the Finance Supplementary Bill 2019 by the National Assembly could not uplift the confidence of market participants.

With that said, tally at week end suggests that the equity bourse settled at 38,950 points, shedding 589 points (down by 1.49 percent) week on week.

Sector-wise negative contributions came from i) Oil & Gas Exploration Companies (230 points), ii) Commercial Banks (127 points), iii) Power Generation & Distribution (78 points), iv) Fertilizer (63 points), and v) Cement (63 points).

Whereas, sectors that contributed positively include i) Automobile Assemblers (91 points) given grant of permission to non-filers to purchase locally assembled vehicles as per Finance Bill, and ii) Inv. Banks/Inv. Cos./ Securties Cos. (30 points). Scrip-wise major laggards were OGDC (111 points), PPL (92 points), MCB (84 points), HUBC (83 points) and ENGRO (39 points).

Foreign selling continued this week clocking-in at USD 3.5 million compared to a net sell of USD 1.3 million last week.

Selling was witnessed in Commercial Banks (USD 2.6 million) and Exploration & Production (USD 2.6 million). On the domestic front, major buying was reported by Individuals (USD 5.1 million) and Companies (USD 3.5 million).

Volumes during the week settled at 114mn shares (down by 29 percent WoW) whereas value traded arrived at USD 33 million (down by 35 percent WoW).

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