KARACHI: The stock market is expected to experience positive momentum in the coming week as Prime Minister Imran Khan’s visit to China and the arrival of an International Monetary Fund (IMF) team in Pakistan generate optimism among investors.
Analysts at Arif Habib Limited predict that agreements likely to be signed during the Prime Minister’s four-day visit to China could bolster sentiment in the stock market. In addition to these agreements, the Prime Minister’s meetings with the World Bank CEO and IMF Managing Director are anticipated to pave the way for a potential financial assistance package.
The stock market witnessed mixed trends this past week as investors remained cautious due to uncertainties surrounding the IMF program, Budget 2019-2020, and macroeconomic challenges under the new Finance Advisor, Dr. Hafeez Shaikh. Despite these concerns, the stock market held its ground, bolstered by promising corporate earnings during the ongoing results season.
The benchmark KSE-100 Index of the Pakistan Stock Exchange (PSX) closed at 37,130 points, recording a decline of 162 points (down 0.43% week-on-week). While certain sectors, such as pharmaceuticals, oil and gas exploration, and oil marketing companies, exerted downward pressure on the stock market, other sectors like commercial banking, cement, and tobacco contributed positively.
Sector-wise, negative impacts on the stock market included pharmaceuticals (-94 points), oil and gas exploration companies (-64 points), and oil marketing companies (-46 points). Conversely, positive contributions were led by commercial banks (+116 points), supported by robust Q1 2019 results despite higher taxes, as well as the cement (+44 points) and tobacco (+8 points) sectors.
Prominent stocks influencing the stock market’s performance included United Bank Limited (UBL), which added 75 points, and ENGRO (+28 points), while Pakistan Petroleum Limited (PPL) and Fauji Fertilizer Company (FFC) dragged the index down by 51 and 30 points, respectively.
Foreign investors returned to the stock market, recording net buying of USD 9.3 million this week, a stark reversal from the USD 1.9 million net selling in the previous week. Notable buying activity was observed in commercial banks (USD 5.3 million).
Trading volumes in the stock market fell by 30% week-on-week to 122 million shares, while the total value traded decreased by 15% to USD 33 million. As optimism builds, investors are looking forward to further developments that could shape stock market trends in the days ahead.
