Pakistan Stock Exchange (PSX) lost 62% of the gains made a week ago, tumbling down by 5.35% or 1,678 points to close at 29,672 points during the week ended 30th August 2018. The placement of Pakistan on ‘enhanced expedited follow up list’ by Asia Pacific Group (APG) on 23rd August 2019 dampened investors’ sentiment. In addition to that, the reported potential divestment of PPL (10% of shares) and OGDC (7% of shares), index heavy weights witnessed further selling pressure. The Government of Pakistan (GoP) also introduced presidential ordinance to waive off 50% of outstanding GIDC overdue from the CNG, power, fertilizer and industrial gas consumers, while allowing them the option to avail non-cash settlement against outstanding sales tax, subsidy and duty drawback receivable from the GoP. The development was positive, especially for fertilizer sector. However, HASCOL’s disappointing results spooked out the positive sentiment of GIDC development. Major news during the week included: 1) SECP and NCCPL considering steps to enhance market liquidity, 2) the GoP deciding to privatize 10 state owned units, 3) fiscal deficit for FY19 was reported at 8.9% of GDP, 4) GoP considering airspace closure and banning trade routes for India, and 5) Royal Vopak discussing its investment plan worth US$2.8 million in Pakistan aiming at LNG terminal, Polypropylene plant and PARCO coastal refinery. Top performers during the week included: GWLC and FFC, while HASCOL, PAEL and OGDC remained the worst performers. Average daily turnover declined by 29%WoW to 123 million shares. LOTCHEM, KEL, MLCF, UNITY and OGDC remained major volume churners. No major results are scheduled for the upcoming week. Inflation during upcoming months will remain critical in determining monetary policy outlook and higher than expected inflation could be sentiment dampener.
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