Weekly Re­view: Stocks show mild re­cov­ery af­ter Brexit blues

Pakistan Observer - - ECONOMY WATCH -

KARACHI—The tur­moil in global mar­ket in the af­ter­math of Brexit de­ci­sion kept the lo­cal bourse fairly sub­dued in the week ended on July 1 with the mar­ket only gain­ing 1.1 per cent, or 394 points, week-on­week amid thin vol­umes. The week started with Brexit blues drag­ging the mar­ket down by more than 400 points in in­tra-day trad­ing as aftershocks of the ref­er­en­dum on Bri­tain’s exit from the Eu­ro­pean Union ap­peared and re­tail in­vestors traded cau­tiously. By mid-week, the bourse bounced back as re­gional mar­kets switched to a re­cov­ery mode and in­vestors got clar­ity on the lim­ited im­pact of Brexit on Pak­istan’s econ­omy.

How­ever, the trad­ing week ended on a dull note on Thurs­day. The mar­ket re­mained closed on Fri­day on ac­count of Jum­matul Wida. Global crude mar­kets also staged a come­back dur­ing the week, touch­ing $50 per bar­rel (Brent), stim­u­lat­ing the oil and gas sec­tor to out­per­form the bench­mark KSE 100-share in­dex by 0.2 per cent. Among spe­cific stocks, K-Elec­tric re­mained in the lime­light dur­ing the week on ru­mours of its po­ten­tial ac­qui­si­tion. Other key sec­tor was banks and fi­nan­cial in­sti­tu­tions that kept the mar­ket in the green, ab­sorb­ing the sell­ing from lo­cal in­sti­tu­tions. Blue-chip stocks led the gains with Lucky Ce­ment, United Bank Lim­ited, Da­wood Her­cules and Hubco Power cu­mu­la­tively con­tribut­ing 204 points, while Fauji Meat was the ma­jor drag on the in­dex con­tribut­ing -254 points with a cu­mu­la­tive vol­ume of 3,000 shares. Mean­while, the Pak­istan Stock Ex­change re­placed four com­pa­nies in the KSE Meezan In­dex (KMI-30) with an equal num­ber of con­stituents as part of re-com­po­si­tion of one of the two indices of Shariah-com­pli­ant stocks.

The mar­ket sen­ti­ment re­ceived a sig­nif­i­cant boost as the IMF re­view con­cluded suc­cess­fully, in­di­cat­ing the rul­ing party’s con­tin­ued fo­cus on fis­cal con­sol­i­da­tion and struc­tural re­forms. Ad­di­tion­ally, the ap­proval of $600 mil­lion ADB loan for struc­tural re­forms sup­ported in­vestor sen­ti­ment. For­eign in­sti­tu­tional port­fo­lio in­vest­ment (FIPI) recorded an out­flow of $3.6 mil­lion dur­ing the week as op­posed to out­flow of $20.5 mil­lion last week.

Av­er­age vol­umes traded fell 8.1 per cent weekon-week and the value of shares traded dropped 13.6 per cent week-on-week. Bata Pak­istan Lim­ited man­u­fac­tures and sells rub­ber, leather, and mi­crolon san­dals and shoes. Ab­bott Lab­o­ra­to­ries (Pak­istan) Lim­ited man­u­fac­tures, im­ports, and mar­kets re­search based phar­ma­ceu­ti­cal, nu­tri­tional, di­ag­nos­tic, hospi­tal, and con­sumer prod­ucts. The com­pany’s key prod­ucts in­clude an­tibi­otics for res­pi­ra­tory tract in­fec­tions, pep­tic ul­cer dis­ease, and den­tal in­fec­tions. Pak­istan To­bacco Com­pany Lim­ited man­u­fac­tures and sells cig­a­rettes. Feroze 1888 Mills Ltd man­u­fac­tures and sells a wide range of cot­ton tow­els and fab­rics. Rafhan Maize Prod­ucts Com­pany Ltd pro­duces corn oil, in­dus­trial starches, liq­uid glu­cose, dex­trin, gluten meals, and other corn re­lated prod­ucts. The com­pany also pro­duces a wide range of co-prod­ucts such as gluten feeds, meals, and hy­drol. Ju­bilee Gen­eral In­sur­ance Com­pany Lim­ited is an in­sur­ance provider. The group sup­plies a num­ber of lines of cov­er­age, in­clud­ing health, fire, marine and mis­cel­la­neous.—Agen­cies

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