Stock Watch

Stocks remains range bound; KSE-100 index marginally up
Summary

It was a lacklusture week with investors remained watchful over the regional developments with the two-day visit of PM Imran Khan to Uzbekistan. New wave of coronavirus and bus blast killing 9 Chinese and 4 Pakistanis in Dasu and massive pre-election rallies in Azad Jammu & Kashmir. With results of fourth quarter FY21 round the corner, Eid holidays announced 21st July and the rollover week after that, kept the investors cautious in their trading.

The greatest worry for investors was spike in coronavirus cases as indicated by NCOC head Asad Umer to call in army. Vaccination made mandatory for domestic travel. The positivity ration increasing to 3.79 percent. The Sindh government had already initiated a host of measures including closure of indoor dining and cinemas. Among the positive news workers remittances for June clocked in at $2.69 bn, up 9pc year-on-year. The Large-Scale Manufacturing continued its growth momentum in the fourth consecutive month as big industrial sectors output rose year-on-year by 36.84 per cent in May as per PBS.

Among scrips Lucky Cement leapt forward as the company announced collaboration with Samsung. Major positivity came from OGDC on rumour of discovery in Waziristan. Commercial banks gained in anticipation of healthy bottom line and good payout with the announcement of their final results. Investors lost interest in the refinery sector in the absence of the much-talked about new comprehensive refinery policy

During the week, the index added 270.86 points to close at 47,834.33 on Friday. The average volume was 486m. The Market capitalization increased by Rs.31 bn to close at Rs.8.347 trillion. The foreigners remained buyer by $4.61m.

Monday: KSE-100 index 47,447.08 change (-) 116.37 volume 475m.

Tuesday: KSE-100 index 47,480.50 change +33.42 volume 497m.

Wednesday: KSE-100 index 47,471,47 change +10.97 volume 508m.

Thursday: KSE-100 index 47,628.26 change +136.79 volume 506m.

Friday: KSE-100 index 47,834.33 change +206.07 volume 349.

Participants/Activity

On average shares of 419 companies were traded. Of these 194 were gainer and 206 were loser and 19 remained unchanged.

Foreigners were net buyer $4.61m during the week; companies were seller by $2.3m, Banks were buyer $1.70m; Mutual fund net buyer

$0.02m; individuals net seller $9.98m and Insurance Co. buyer $12.73m.

Volume leaders during the week were: WTL 231m; TPL Corp.150m; Ghani Global Glass 104m; TPL Properties 93m; Treet Corp 64m; K-Electric 58m; Unity Foods 38m; PIBTL 33m; Fauji Foods 25m; and Al Shaheer Corp 18m.

Participation : Av. Total Companies 419; Gainers 194; Loser 206 and Unchanged 19.

Triggers

– $1bn takes SBP reserves to five-year high at $18.2bn which is higher than $18.14 held in the financial year2015-16. On July the country’s reserves were $24.4 bn compared to $23.098 bn in FY16.

– Tarin orders procurement of 100,000 tonnes of sugar to build reserves.

– Positive growth of 14.57 % in large scale manufacturing.

– Record remittances of $29.4 bn during FY21.

– Govt raises Rs569 bn thru T-bills auction on Wednesday.

– Bank deposits grew 22 per cent year-on-year fueling both the investments and advances in fiscal year 2020-21

Conclusion

The investors to be watchful as several negative factors that could impede the index rise. Going forward. The increasing Covid cases, the rollover week , geopolitical situation, the upcoming Azad Kashmir election and proper handling of Dasu bus blast in which 9 Chinese were killed.

Raees Uddin Khan,
Research & Development Institute of Securities Management Research & Training (Pvt) Ltd, Karachi
Dated: Jul 17, 2021

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