Pakistan Stock Exchanges closes flat despite extreme volatility

The benchmark index of Pakistan Stock Exchange closed the week ended on 5th March 2021 at 45,837 points, almost flat. The week was marked by extreme volatility on the back of political drama surrounding Senate elections. The market registered major uptick in initial half of the week owing to anticipations regarding the elections. However, the index went downhill following the news of PTI’s Minister for Finance & Revenue, Dr. Hafeez Sheikh being unsuccessful in his bid to become a senator from Islamabad, losing to the former Prime Minister Yousuf Raza Gillani. It is another thing that PTI emerged as the single largest party in Senate with 26 seats. Nevertheless, the market recovered on last trading day of the week.

Other major news flows for the week included: 1) UN Secretary General and United States welcoming understanding between India and Pakistan for reducing cross-border tensions, hoping that this would pave the way for further talks between the two countries, 2) FBR surpassing 8MFY21 tax collection target by Rs13 billion to cumulative tax collection of Rs2,911 billion with downward revision in its tax collection target to Rs4,700 billion as part of agreement with the IMF, 3) CPI recording an increase of 8.7%YoY in February, 4) exports registering a growth of 4.6%YoY to US$16.3 billion during eight months of current financial year, 5) cement sales posting a growth of 14%YoY to 37.95 million tons, 6) oil consumption rising 13%YoY to 12.67 million tons.

Flow wise, Foreigners remained net sellers during the week (net sell of US$10.66 million) together with Mutual Funds (net sell of US$9.37 million) and Companies (net sell of US$1.42 million) which was mainly absorbed by Insurance Companies (net buy of US$8.40 million) and Banks (net buy of US$7.98 million).

Top performers for the week included: SNGP, KAPCO, ANL, INIL and GATI; whereas laggards were: FML, STJT, HMM, SFL and PSX.

The market sentiments in the next week will be driven by outcome of ‘Vote of Confidence’ in Parliament that will provide much needed stability on the political front. Major corporate result announcements in the upcoming week include GLAXO, HASCOL and IGIL.

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