Weekly Review: hopes of recovery in stock market on IMF program

KARACHI: With the IMF program expected to be announced soon, investor sentiment can be expected to rebound, analysts said on Saturday.
The analyst at Arif Habib Limited said that clarity over the economic direction from the IMF program is likely to resuscitate confidence of investors.
As Ramadan started this week, the local bourse continued its bearish trend with volumes continuing to slump. Talks between GoP and IMF are in the final round and an announcement of a program can be expected any time soon.
Concerns of further interest rate hikes, depreciation of the PKR and fiscal consolidation measures (revision in energy prices, withdrawal of subsidies/tax concessions etc) kept the investment sentiment negative. The KSE-100 index closed at 34,717 points (-1,406 points WoW), down 3.9 percent WoW.
Negative sector-wise contributions came from i) Fertilizers (313 points), ii) Oil & Gas Exploration Companies (284 points), iii) Cements (130 points), iv) Pharmaceuticals (113 points) and v) Oil & Gas Marketing Companies (108 points). Scrip-wise negative contributions came from ENGRO (131 points), PPL (104 points), SEARL (84 points) and MARI (83 points). Whereas, positive scrip-wise contributions came from NESTLE (32 points), HBL (21 points), and COLG (11 points).
Foreign buying continued this week clocking-in at USD 10.4mn compared to a net buy of USD 4.8mn last week. Buying was witnessed in Commercial Banks (USD 10.9mn) and Cement (USD 1.0mn). On the domestic front, major selling was reported by Mutual Funds (USD 10.7mn) and Insurance Companies (USD 5.7mn). Average Volumes settled at 74mn shares (down by 30 percent WoW) while value traded clocked in at USD 23mn (down by 22 percent WoW).
Other major news: i) Coal-fired power project’s receivables swell to $150mln, ii) Move to withdraw Rs700bn tax exemptions, says official, iii) Chaos in FBR as govt aims for budget on May 22, iv) Private sector tax expert named FBR chairman, and v) Public debt surges Rs3.6 trillion to a hefty Rs27.8 trillion.
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