KARACHI: The stock market kept struggling for its sustainability in the outgoing week as confusion and uncertainty surrounded potential investors until late Friday when the IMF, in its concluding remarks affirmed that Pakistan had been successful in completing the “structural benchmarks” as well as in meeting “all end-December performance criteria” which had been set for the implementation of $6 billion Extended Fund Facility programme.
But there were other persisting factors, in particular the FATF concerns and large suspension of imports from China, which had been hammering the stock market.
Altogether, the Pakistan Stock Exchange’s (PSX) benchmark KSE 100-Share Index obtained only 99.63 points on a weekly basis as last Friday the Index closed at 40,143.63 as compared to yesterday’s 40,243.26.
Other factors included strife political disagreements between coalition parties in the government until some of them were settled in meetings with the ruling PTI.
Yesterday, the Index opened at 40,594.24, and lost 212.18 points or 0.52pc, while the apex of the day remained 40,603.16 points whereas the lowest the stocks tumbled to was 40,094.29.
On Thursday, the PSX observed bearish trend, and closed at 40,455.44 points after losing 75.69 points or 0.19 percent. It showed an intraday high of 40,787.24 and a low of 40,325.22 that day. Total volume traded for the index was 139.38 million shares.
On Wednesday, the stock market witnessed witnessed robust recovery on the back of healthy buying when some virus concerns evaporated and reports emerged of relaxation from the IMF. That day, the Index gained 816.67 points or 2.01 percent to close at 40,531.13, and the volumes stood at 126.56 million shares.
On Tuesday, the Index closed at 39,714.46 points with a gain of 417.76 points (1.05pc).
On Monday, the benchmark KSE 100 Index witnessed a massive turbulent session as indices continued to bleed all day long. The market lost 846.93 points, recording an intraday low of 39,296.70, reaching its two-month low. The Index opened at 40,150.34 on Monday.
The previous week followed similar trend and lost massive 1,487 points or 3.6pc, representing the highest weekly decline in recent months during which the market regained much stability, and dropped to 40,143.63.
Investors adopted extremely cautious behaviour after more headlines cover mounting deaths due to coronavirus taking full hold, a plunge in global crude oil prices, unchanged main policy rate by the State Bank of Pakistan at 13.25 percent for the next two months, uncertain FATF’s decision and political uncertainty in the country.
The SBP in the latest monetary policy statement kept the interest rate unaltered and pushed selling in the leveraged sectors such as cement and steel. Concerns over higher than expected reading of inflationary pressures and political uncertainty sparked by coalition partners of the government also kept investors away from the market.
Moreover, the outcome of the FATF in the upcoming review remained unclear. Several reports claimed that the substantial progress was made to pull the country out of the grey list, but Minister for Economic Affairs Hammad Azhar noted it was premature to speculate on any outcome.
They were also spooked by uncertainty over the decision by the Financial Action Task Force (FATF) on Pakistan status to be decided this month and the country’s ability to pull itself out of the grey list. Investors were also rattled over the inflation figures for January which came out at an alarming 12-year high of 14.6pc.
Some traders and businessmen in Pakistan said that loading of goods in China has come to a halt. Most industries that depend on raw materials imported from China usually build stocks to last them through the holiday closure, but in some cases at least those stocks are now running low and businesses are left wondering when normal imports might resume.