KSE-100: 2237 points flushed out from the index during the week

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Zubair Yaqoob
Karachi
Unwarranted selling and fragile sentiments witnessed at the index this week correlated to India’s inexcusable revocation of Kashmir’s special status which, once again brought to the forefront, political rivalry between the two nuclear-armed South Asian neighbors. With peace in the region tested, investors felt temperatures in the domestic geo-political environment spike, translating to an overflow of negativity.
The market closed at 29,429pts, shedding 2,237pts / 7.1% WoW. Sector-wise negative contributions were led by Commercial Banks (844pts) Oil & Gas Exploration Companies (529pts), Power Generation & Distribution (221pts), Fertilizer (182pts), and OMC’s (121pts). Scrip-wise negative contributions came from UBL (216pts), OGDC (195pts), HBL (187pts), PPL (176pts) and HUBC (163pts).
Foreign selling was witnessed this week clocking-in at USD 0.9mn compared to a net buy of USD 3.4mn last week. Selling was witnessed in Commercial Banks (USD 4.5mn) and Oil & Gas Marketing Companies (USD 0.2mn).
On the domestic front, major buying was reported by Individuals (USD 10.9mn) and Banks / DFIs USD 3.5mn. Average Volumes settled at 72mn shares (up by 26% WoW) while average value traded clocked-in at USD 19mn (up by 44% WoW).
Other major news: Remaining on FATF grey list to impact capital inflows: IMF, Economy likely to grow below 4%: ADB, Pakistani dollar bonds fall, 30m penalty: Furnace oil, coal-based power generation minimized, Foreign exchange: SBP reserves fall 0.49% to USD 7.73bn.
With the index on a hiatus for Eid break next week, Analysts believe investors will find time to cool off and breathe a sigh of relief. During this time, Analysts advise market participants to reassess the index level and the recent blood bath, whereby value buying opportunities have opened up. In the immediate term, result season could dictate performance of certain scrips.