TFD Stocks Overview

PSX loses 4,425 points edging lower for the second week

KARACHI: Pakistan Stock Exchange (PSX) edged lower for the second straight week, witnessing the worst weekly performance in over three years, and the benchmark index shed 4,424.93 points (-6.69 percent) to close at 61,705.09 points.
The market remained under heavy selling pressure because of several factors, particularly profit-booking ahead of year-end and the surging international oil prices due to attacks on ships in the Red Sea. Dismal data on large-scale manufacturing (LSM) growth, which fell 4.1% year-on-year (YoY), and pre-election uncertainty also weighed on investors’ minds that dented their confidence.
There were encouraging developments as well, like the World Bank’s approval of a $350 million financing under RISE-II programme and loan deals worth $1.2 billion with the Asian Development Bank (ADB) for budget financing, which kept investors’ spirit alive. Besides, hopes grew that the International Monetary Fund (IMF) board meeting, scheduled for January 11, would approve the release of a second loan tranche of $700 million.
According to a brokerage firm AKD Research, after surpassing each high for the last two months, the benchmark KSE-100 index experienced a downward trend, adding selling in scrips was witnessed as the year closed. The stock market, which had been soaring to new heights of over 67,000 points since September 2020, entered a ‘correction phase’ this week, dropping more than 8 percent from its highest level.
As per the brokerage report, market participation witnessed a slight decline, with daily traded volumes averaging 1.22 billion shares (down 3% WoW). On the sectorial front, textile weaving and automobile parts & accessories were amongst the best performers with a growth of 2% and 0.6% WoW, respectively.
Whereas, close ended mutual funds, modarabas, and investment banks were the top laggards with a decline of 14.7%, 11.9%, and 11.5% WoW, respectively. Flow wise, major net selling was recorded by Mutual funds with a net sale of US$14.26 million. On the other hand, Insurance companies absorbed most of the selling with a net buy of US$9.31 million, the report added.
Company-wise, top performers on a week-on-week were PSMC (+10pc), HCAR (4.3pc) and PSEL (2.6pc), while top laggards were PIBTL (-19pc), AHL (-18.4pc), PAEL (-17.7pc), DAWH (-17.7pc), and PSX (-15pc).
The market turnover remained heightened during the week, with an average traded volume of 687.36 million shares. However, the traded value fell significantly to Rs15.96 billion as compared to Rs22.48 billion in the previous week, marking an increase of 9.1pc month-on-month (MoM) in the number of shares while a decrease of 29pc MoM in traded value. Moreover, the overall PSX All-Share was recorded at 1.21 billion shares worth Rs 22 billion, marking a decrease of 3pc MoM in the number of shares while a decrease of 27.46pc MoM in traded value.
JS Global analyst Shagufta Irshad, in her review, said that the KSE-100 index said, “The market is down 8pc from its intra-day high of 67,094 recorded during the last fortnight.”
Meanwhile, the State Bank’s foreign exchange reserves fell below the $7 billion mark due to debt repayments. Oil imports and textile exports showed 16% and 6.5% YoY decline respectively during 5MFY24. “With the market going through a corrective phase, investors largely ignored positive news regarding the cabinet committee’s approval of disbursement of Rs262 billion in payables to IPPs to contain the energy sector’s circular debt,” the JS analyst added.
Arif Habib Limited, in its report, noted that investors opted to book profit in various sectors, which resulted in the market closing in the red. Foreigners bought shares valuing at $2.4 million during the week under review against net buying of $6.3 million last week, it said. – TLTP