RECORDER REVIEW
KARACHI: Last week saw a “firestorm” at Karachi bourse where the KSE-100 index lost 0.2 percent (72 points), Week-on-Week (WoW), because of China-led global economic uncertainty.
Having shed record 1419 points or 4.1 percent in the week’s first session, the benchmark KSE-100 index regained 2.7 percent during last two sessions to finally close at 34,447.47.
The recovery was led by index heavyweight energy stocks as international crude oil prices rebounded on Thursday by 10 percent, its biggest single-day gain since 2009. Better-than-expected quarterly corporate results and relatively calmer political situation in the country were other morale boosters for the risk-averse equity investors.
“Meltdown in global equities and currencies on concerns over slowing global economy and further devaluation of Chinese currency sparked a firestorm at KSE,” said Raheel Ashraf of JS Global. Topline analysts observed “extreme volatility” on the market following the trend in regional equities and commodities markets.
The trading volume averaged on 301 million shares, up five percent WoW. What, however, kept the market players jittery was the continued foreign selling that accumulated for the week under review at $ 42.21 million.
Last week, this number stood at $ 43.5 million. “Their total net selling for the month has now reached $79.9 million while their 2015YTD net selling has reached $175.7 million,” said analysts at Topline Research.
“The current wave of political instability and lack of excitement over corporate results put investors skeptical about the market directions,” said Hassan Ilyas of Shajar Research.
In addition, he said, integration of all three exchanges into Pakistan Stock Exchange and the finance minister’s take over economic stability coupled with the approval of $1.2 billion country partnership strategy (CPS) program by Asian Development Bank (ADB) helped the index sustain its gains.
In upcoming week, Ilyas said, local equities are likely to follow the international markets as the lack of corporate announcement amid few positives for momentum to sustain. Key highlights of the week were: IMF probing government’s numbers on last year’s fiscal deficit, GSP status to US markets being restored till Dec-2017, floods wiping out crops worth Rs 85 billion, and Nissan exploring car making options.
