Stock Watch

PSX loses 202 points on foreign selling and falling rupee
Summary

The week ended with the completion of month of September. The September turned out to be the worst month for trading for the investors. The massive share offloading by foreign investors was the cause of heavy losses the KSE-100 Index suffered during September. The latest data issued by the SBP showed that in September the inflow of foreign investment in equity was of $50.8 million while the outflow was $136.8 million. There was a net out flow of $86m from the equity market in the month. The interbank market rates/open market rates for dollar on Friday was 169.60 /171.30. It climbed to highest 170.45/172 on Friday.

The KSE-100 Index lost 201,82 points or 0.44 percent and closed at 44,871.70 trading activity remained low as daily volume on ready counter decreased to 355 million shares as compared to 384m previous week. Foreign investors also remained net sellers of shares worth $21,86 m. Total market capitalisation, however decreased by Rs.23 billion to Rs.7.808 trillion.

Monday: KSE-100 Index 44,817.76 (-) 255.76 volume 301m Mkt. Cap Rs. 7,773 T

Tuesday: KSE-100 Index 45,274.93 (+) 457.17 Volume 365m Mkt. Cap Rs.7,828 T

Wednesday: KSE-100 Index 44366.74 (-) 908.19 Volume 468m Mkt. Cap. Rs.7,701 T

Thursday: KSE-100 Index 44,899.60 (+) 532.86 Volume 372m Mkt. Cap Rs.7,804 T

Friday: KSE-100 Index 44,871.70 (-) 27.90 Volume 267m Mkt. Cap Rs.7,806 T

Participants/Activity

Foreigners were net seller $21.86m during the week; companies were seller by $1.84m, Banks were buyer $10.14m; Mutual fund net seller $1.70m; individuals net buyer $3.09m and Insurance Co. were buyer $ 8.09m.

Volume leaders during the were: Byco Petroleum 146m; World Call Tele 139m; Telecard Ltd 88m; Dolman City 55m; Unity Foods 51m; Azgard Nine 47m; K-Electric 32m; Nishat (Chunian) 17m; TPL Corp Ltd 15m; Hascol Petroleum 14 m; Aisha Steel Mills 13m; Hum Network & Bank Alfalah 10m each.

Participants: Companies 556; Gainer 273; Loss 267 and Unchanged 16.

Triggers

– FBR collected Rs.1.395 trillion in the first quarter of the current financial year exceeding the target of Rs.1.211 trillion by Rs.186 billion.

– Making new records, the government on Thursday increased the prices of all petroleum products , including LPG by up to 17 percent with immediate effect for the next 15 days.

– The SBP has imposed 100 per cent cash margin on another 114 items to curb their import which has grossly destabilized the exchange rate and widen both trade and current account deficits.

– The foreign exchange reserves of the SBP fell by $249 million to $19.294 billion on Sept 24.

-Pakistan to seek some space from IMF: Tarin would try to convince the Fund during the 6th review that an increase in electricity tariff is not the solution to the problem.

Conclusion

According to a research report of Topline Securities , with its benchmark losing 12 percent value in dollar terms, the Pakistan Stock Exchange ( PSX )remained the third worst- performing equities market internationally in July-Sept quarter

The poor performance of the stock market arising out of a higher-than-expected current account deficit caused by increasing domestic demand and rising international commodity prices. . The same phenomenon was reflected in the rupee-dollar parity ,which worsened by 8 percent in the latest three-month period. Global index provider MSCI also decided to down-grade Pakistan in the last quarter from emerging market to frontier market, which affected investors’ sentiments.

The average traded volume in the ready market decreased18 percent year-on-year and 38 percent quarter-on-quarter in July-Sept. The average traded value dropped 21 percent on an annual basis and 32 percent on a quarterly basis to Rs.14 billion per day in the same period.

Raees Uddin Khan,
Research & Development Institute of Securities Management Research& Training (Pvt) Ltd, Karachi
Dated: October 2, 2021

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