Market Review: technocrats’ inclusion seen positive for policy making

KARACHI: The stock market likely to gain momentum following major reshuffle in the federal cabinet and inclusion of technocrats.
Analysts at Arif Habib Limited expected the market to continue the momentum it gained on Friday and remain in the green next week.
“Inclusion of technocrats into the federal cabinet may be seen as a positive step for policy making.”
Valuations across the board have opened up and investors are advised to build positions in value stocks.
The domestic equity bourse remained under pressure the entire week owing to lack of clarity over the PM’s decision to make changes in the cabinet, which finally ended with major changes including the removal of Asad Umar from the Finance Ministry on Wednesday.
Failure to get an Amnesty Scheme approved by the cabinet by the Finance Minister also depressed sentiment. Moreover, Commercial Banks remained under pressure mid-week as news of consultation process for creation of a Treasury Single Account (TSA) that would transfer government deposits in Commercial Banks to the SBP, took rounds in the market.
However on the last trading day of the week the market rebounded strongly, accelerating 481 points during the day. The benchmark index closed at 37,292 points at the end of the week, receding by a mere 45 points WoW.
Negative sector-wise contributions came from i) Tobacco (59 points), ii) Cement (55 points), and iii) Engineering (26 points). On the flip side, sectors that contributed positively include i) Fertilizers (72 points), ii) Oil & Gas Exploration Companies (26 points), iii) Automobile Assembler (25 points), and iv) Power Generation & Distribution (25 points).
Scrip-wise major negative contributions came from PMPK (32 points), BAHL (29 points), PAKT (27 points) and BOP (24 points). Positive contributions came from FFC (78 points), UBL (58 points), PPL (37 points) and HUBC (36 points).
Foreign selling continued this week clocking-in at USD 1.9 million compared to a net sell of USD 2.2 million last week.
Selling was witnessed in Exploration & Production (USD 5.3 million) and Oil & Gas Marketing Companies (USD 0.4 million).
On the domestic front, major buying was reported by Companies (USD 4.6 million) and Individuals (USD 2.3 million). Volumes settled at 176 million shares (up by 18 percent WoW) while value traded clocked in at USD 39mn (up by 16 percent WoW).

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