Pakistan Stock Exchange recovered 47% of the points lost in the earlier week because of poor results of HASCOL and announcement of privatization of index heavy weights, PPL and OGDC. The benchmark index closed the week ended on 6th September at 30,467 points, up 2.68%WoW. Based on NCCPL data, foreigners emerged net seller of US$5.45 million and Mutual Funds also remained net seller of US$3.11 million. Individuals emerged net buyers of US$6.15 million. Top performers of the week included: PPL, OGDC and APL, while HASCOL, GWLC and MEBL remained the worst performers. Average daily turnover declined by almost 25%WoW to 93 million shares. MLCF, WTL, OGDC, DGKC and PAEL emerged as major volume churners. The movement of index during the week portrayed interesting movement.
The first trading session closed in green, up 1.3% in anticipation of lower inflation numbers. The market quickly lost steam in the following session. The Bulls made an entry in middle of the week, when PBS finally rolled out the new methodology based inflation for August 2019, reported at 10.5%YoY, as against 11.6% based on older methodology. Lower CPI number helped the market gaining 899 points, on the expectations of potential monetary easing. The third trading session also witnessed withdrawal of presidential ordinance which was signed to waive off 50% of outstanding GIDC overdues from the CNG, power, fertilizer and industrial gas consumers. However, the market played down the news flow, as high dividend yielding Fertilizer stocks remained buoyant, despite the negative development.
Major news during the week included: 1) SECP finalizing reforms agenda to revitalize capital, 2) granting of lucrative tax incentives to non-resident firms investing in Pakistan debt market, 3) scheduling of a crucial meeting of FATF in Bangkok on 9th September, 4) GoP reversing GIDC amnesty, 5) IMF announcing to send SOS mission to Pakistan on 16th of this month and 6) the government requesting for early SC hearing on GIDC pleas.
In the coming week, market will be driven by the developments on macro level, where APG is scheduled to meet on 9th and 10th of this month in Bangkok and discuss Pakistan’s progress report. The meeting is expected to form the basis of a definitive decision on whether Pakistan remains on the grey list or is blacklisted. Furthermore, IMF delegation is expected to visit Pakistan the following week to discuss fiscal issues, as primary deficit of 3.6% for FY19 was widely different from 1.8% fixed during the finalization stages of IMF deal. Sector-wise, GIDC settlement is expected to remain in news in the upcoming week. Meanwhile, major results to be announced include: PRL, HUBC, ASTL and NPL.