Weekly Review: FATF meeting outcome to drive market

KARACHI: The outcome of FATF meeting will move the direction of the stock market during next week, analysts said.

The analysts at Arif Habib Limited said that the market to remain positive on the back of improving external account position, country witnessing foreign net inflows in T-bills and lower inflationary reading expected in October 2019.

On the other hand, government is focusing to manage twin deficits and to meet IMF’s second quarterly revenue and tax collection targets.

However, FATF review is scheduled on 13-18th October to discuss Pakistan’s progress to control terror financing and corrective measures.

“Any favorable or unfavorable outcome could pose upside or downside risks to market performance.”

This week trading commenced on positive note attributable to Asia Pacific Group’s report on money laundering in which Pakistan was found partially compliant on majority of the issues which improved investors’ confidence.

On the other hand, Prime Minister Imran Khan’s successful visit to China in which they expressed satisfaction on CPEC progress further improved overall sentiment.

Moreover, news of increase in cement prices in the Northern Region as per PBS was the major driver for the Cement sector throughout the week.

Decline in money market yields and inversion of the yield curve continued to attract investors back to equities.

As a result, the benchmark KSE-100 index closed above the 34,000 mark at 34,476 points, increased by 1,442 points or 4.37 percent WoW.

Contribution to the upside was led by i) Commercial Banks (+492 points) amid expectation of healthier financial result, ii) Oil and Gas Exploration Companies (+270 points) due to attractive valuation, iii) Fertilizer (+146 points), iv) Pharmaceuticals (+90 points), and v) Cement (+87 points).Scrip wise major gainers were HBL (+153 points), MARI (+116 points), UBL (+104 points), POL (+83 points), and HUBC (+76 points). Whereas, scrip wise major losers were ISL (-11 points), PMPK (-11 points), and EFUG (-8 points).

Foreign offloaded stocks worth of USD 4.15 million compared to a net sell of USD 4.7 million last week. Major selling was witnessed in Commercial Banks (USD 4.56 million) and Exploration & Production (USD 1.73 million).

On the local front, buying was reported by Companies (USD 3.91 million) followed by other organizations (USD 3.59 million).

That said, average daily volumes for the outgoing week were massively up by 28 percent to 284 million shares likewise value traded increased by 42 percent to USD 56.9 million.

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