Market Review: IMF loan program to move trading pattern

KARACHI: The staff level agreement of the IMF program is expected to restore confidence of the market, analysts said on Saturday.
Volumes usually dry out in the month of Ramzan given shorter trading hours. Albeit, with budgetary proposals following in, we believe certain sectors / scrips may come under limelight.
Analysts said that while the outgoing quarter remained positively surprising with sectors such as Commercial Banks, Cements, and Chemicals unveiling above street consensus result outcomes, investors continued to remain wary owing to persisting economic despondency.
This has contributed to ambiguity over future corporate earnings growth, and coupled with a lack of clarity over the finalization of the IMF program, the KSE-100 index has continued to remain under pressure. This week the bourse ended at 36,123 points, shedding 1,008 points (down by 2.7 percent) WoW.
Negative sector-wise contributions came from i) Oil & Gas Exploration Companies (308 points) amid fall in international oil prices, ii) Commercial Banks (171 points), iii) Fertilizers (148 points), iv) Power Generation & Distribution (89 points) and Oil & Gas Mareting Companies (70 points). On the flip side, sectors that contributed positively include i) Tobacco (27 points) and ii) Insurance (5 points).
Scrip-wise negative contribution came from PPL (125 points), OGDC (90 points), POL (78 points) and HBL (73 points). Whereas, positive scrip-wise contributions came from PSMC (24 points), PMPK (20 points), HMB (12 points) and PAKT (7 points).
Foreign buying continued this week clocking-in at USD 4.8mn compared to a net buy of USD 9.3mn last week. Buying was witnessed in Cements (USD 3.9mn) and Commercial Banks (USD 2.0mn). On the domestic front, major selling was reported by Mutual Funds (USD 13.4mn) and Broker Proprietary Trading (USD 0.6mn). Volumes settled at 105mn shares (down by 14 percent WoW) while value traded clocked in at USD 29mn (down by 13 percent WoW).
Other major news: i) Cabinet committees dealing with economic matters reconstituted, ii) FTA Phase-II signed with China, iii) Rs14.38 per litre increase in petrol price recommended by Ogra, iv) Talks on $8 billion bailout: Government, IMF in final round, v) CPI-based inflation recorded at 8.8 percent in April on YoY basis, and vi) Foreign exchange: SBP reserves dip 2.4 percent to stand at $8.8 billion.

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