Weekly Review: Rupee gain to boost investors confidence

KARACHI: The recent gain in rupee value may boost the confidence of investors at the stock market.

However, they said that the market to remain range bound due to lack of positive triggers in upcoming week followed by feeble results of cyclical sectors.

Analysts at Arif Habib Limited said that recent appreciation of PKR against green back which is trading at all-time lowest in terms of REER would give confidence to foreign investors and attract foreign flows in market.

Whereas, key risks to the index include economic concerns on account of high Current Account Deficit and slowdown in large scale manufacturing.

This week trading commenced on a negative note following last week’s trend as investors continue to take account of i) surge in inflation to 68 months high in lieu of regular adjustment in utility prices, ii) tighter monetary policy, iii) delay in state enterprise fund, and iv) expectation of weaker result season of some sectors including Cements, Refineries, Automobile and Steel.

Furthermore, political uncertainty kept investors on the back foot given vote of no confidence over senate chairman while traders have announced a country wide protest and strike on CNIC condition and one political party announced a long march. As a result, the benchmark KSE-100 index closed below 32K mark at 31,666 points, down by 437 points or 1.4 percent WoW.

Contribution to the downside was led by i) Commercial Banks (-239 points) amid selling from mutual funds, ii) Tobacco (-57 points), iii) Oil and Gas Exploration Companies (-52 points) on the back of massive decline in international oil prices, iv) Power Generation and Distribution (-35 points), and v) Oil and Gas Marketing Companies (-32 points).Scrip wise major losers were PPL (-69 points), MCB (-62 points), PAKT (-57 points), UBL (-56 points), and BAHL (-44 points). Whereas, scrip wise major gainers were POL (+37 points), ENGRO (+17 points), and PKGS (+15 points).

Foreigners accumulated stocks worth of USD 3.4 million compared to a net buy of USD 8.4 million last week. Major buying was witnessed in Cement (USD 3.1 million) and All Other Sectors (USD 1.2 million).

On the local front, selling was reported by Mutual funds (USD 4.8 million) followed by Companies (USD 1.7 million). That said, average daily volumes for the outgoing week were down by 25 percent to 57 million shares likewise value traded decreased by 21 percent to USD 13 million.

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