April 10, 2022 (MLN): Over the past week, the benchmark KSE-100 has remained volatile as it ended the week down 708 points or 1.57% to settle at the 44,444 point level.
Initially, the stock market went on a selling spree due to the political events that took place in the National Assembly where the motion of no confidence against the incumbent Prime Minister was rejected by the President and the dissolution of the assemblies by the Prime Minister has shaken the confidence of investors. Similarly, a massive depreciation of the PKR against the greenback due to a decline in the country’s foreign exchange reserve has also shaken investor sentiment.
However, the stock market recovered in view of the Supreme Court’s decision to reverse the previous Vice President’s decision and release the authorities of the National Assembly as well as the Prime Minister and further issued the order the President of the National Assembly to hold a session of the Assembly on April 9, the session cannot be adjourned without the conclusion of the motion of censure.
Economically, the SBP raises the interest rate by 250 pts to 12.25%. The main reason for raising the policy rate is to protect external accounts and control inflation. Although rising interest rates are depressing the market, investors do not expect further rate hikes in the near future, according to a note from Spectrum Securities.
During the week the stock market had 3 sessions in favor of the bull while 2 sessions ended in favor bear. The average daily value traded in the benchmark remained at 3.81 billion rupees with an average daily volume of 67.78 million shares.
Negative sector contributions come from cement (318 points), oil and gas exploration companies (89 points), energy production and distribution (80 points), engineering (65 points) and food (60 points). While the sectors that contributed positively were Chemicals (70pts), Fertilizers (43pts), Inv. Banks (20 pts), Electrical Cables and Appliances (5 pts) and Real Estate Investment Trust (2 pts).
Script-level negative contributors were LUCK (145pts), HUBC (60pts), TRG (48pts), DGKC (46pts) and OGDC (45pts). Meanwhile, the negative contribution at certificate level came from EPCL (55 pts), SYS (26 pts), EFERT (24 pts), MEBL (22 pts) and MCB (19 pts).
Meanwhile, the market cap of KSE All Share declined by Rs125.5 billion or 1.65% over the week, being recorded at Rs7.47 trillion from a market cap of Rs7.6tr recorded last week. .
In terms of flows, foreigners were the net sellers during the week, unloading shares worth $3.78 million compared to a net sale of $15.5 million last week. , largely supported by foreign companies in the amount of 5.58 million dollars. Sector-wise, strong sales were seen in banks ($3.8 million) and cement ($1.4 million).
On the local side, the majority of purchases were reported by individuals and banks, amounting to $14.8 million and $4.7 million, respectively. However, mutual funds and insurance companies stood on the other side with net sales of $12.4 million and $4.6 million respectively.
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