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Stocks end flat as investors remain jitter on senate election
Summary

Three events kept the investors on alert during the week. The Supreme Court decision on Monday for Senate election on secret balloting with qualifying clause, the Senate election results on Wednesday and finally the TRG Pakistan’s results announcement on Friday. TRG Pakistan with volume of 138 million shares was the volume leader during the week.

The index closed flat shedding 27.67 points and the volume during the week declined from average 589 million shares to 386 million shares during the week. The market capitalization decreased by 15 billion to close at Rs.8.192 trillion.

On Monday stock opened in green but the Supreme Court decision on Senate election would be held under Article 226, brought down the market. The stock sheds 271.59 points to close at 45,593.43.

There was a rally on Tuesday on aggressive buying. The index added 370.84 points to close at 45,964.27.

The stock extended the overnight gains on Wednesday and added 196 points to close at 46,160.78m.

There was panic on Thursday as Finance Minister loses Senate contest which was considered easy win for the government on Wednesday. The Index lost 882.24 points to close 45,278.54 on the day.

However, market bounced back on Friday on the decision of Prime Minster for the vote of confidence on Saturday. There was a rally of 559 points and stock closed at 45,837.35

Participants/Activity

On average shares of 415 companies were traded. Of these 193 were gainers and 203 were losers and 19 remained unchanged.

Foreigners were net sellers $5.22m during the week; companies were seller by $1.42m, Banks were buyer $7.98m; Mutual fund net seller $9.38m; individuals net seller $4.22m and Insurance were buyer $8.41m.

Volume leaders during the week were: TRG Pakistan 138m; Byco Petroleum 97m; Azgard Nine 92m; Aisha Steel Mills 49m; Ghani Glass Ltd 60m; Pak Refinery 43m; K-Electric 33m; Unity and Hum Network Ltd 21m each; World Telecom Comm 18m and Fauji Fertilizers 14m.

Triggers

— TRG Pakistan Ltd announced its 2QFY21 earnings at Rs3,608m translating into earnings per share EPS at Rs.6.60.

— Inflation edges up to 8.7 percent in February from 5.7 percent in January.

— Exports fall 4.5 percent in February but remain above $2 billion for fifth month in row. The exports proceeds fell to $2.044 billion in Feb from $2.14 billion in the corresponding month last year.

— Cement sales soars 14 percent in 8MFY21 to 37.95m tonnes from 33.31m tonnes in the same period last fiscal year.

— Rupee hits highest level against dollar in FY21. The local currency has so far recovered 6.8 percent in 2020-21 against the greenback on higher inflows and slow demands for dollar.

— Meltdown of 882 points on PSX after Finance Minister loses Senate contest.

— Weekly inflation spikes 15 percent year-on-year. SPI for the week ending March 4 witnessed a hump of 0.16 percent week-on-week and 14.95 percent year on year .

— Higher inflows increased the foreign exchange reserves of SBP by $70 million to $12.978 billion. The total reserves moved to $20.133 billion.

Conclusion

Prime Minister decides to seek fresh vote of confidence from the National Assembly following the upset defeat of his candidate for the federal capital, Abdul Hafeez Shaikh against the joint capital of PDM. The vote of confidence will be taken on Saturday. It is expected that market will move accordingly after the vote of confidence.

Raees Uddin Khan, Research & Development Institute of Securities Management Research& Training (Pvt) Ltd, Karachi.
Dated: March 6, 2021

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