KARACHI: The stock market kept struggling for its sustainability in the outgoing week as confusion and uncertainty surrounded potential investors until Friday when the FATF maintained Pakistan’s status in its grey list of countries with inadequate controls to restrict money laundering and terror financing. These concerns together with uncontrollable spread of coronavirus that has adversely affected the Asian economy, in particular, have restricted the stock market to grow.
Altogether, the Pakistan Stock Exchange’s (PSX) benchmark KSE 100-Share Index obtained only 5.96 points on a weekly basis as last Friday the Index closed at 40,243.26 as compared to yesterday’s 40,249.22.
But there were other persisting factors, including absence of positive triggers, the large suspension of imports from China, which had been hammering the stock market, and strife political disagreements between coalition parties in the government until some of them were settled in meetings with the ruling PTI.
Yesterday, the Index closed at 40,249.22 points after losing 232.43 points (0.57 pc). A total of 85,597,900 shares were traded compared to the trade 112,084,380 shares during the previous day, whereas the value of shares traded during the day stood at Rs3.579 billion as compared to Rs4.718 billion during last trading day.
On Thursday, the PSX registered bearish trend and closed at 40,481 points with the negative change of 92.87 points. A total of 83,552,650 shares were traded compared to the trade 109,559,610 shares during the previous day, whereas the value of shares traded during the day stood at Rs3.97 billion as compared to Rs5.78 billion during last trading day.
On Wednesday, the market closed at 40,574.52 after gathering 399 points. Wednesday’s rally came following confirmed reports from sources that Pakistan will not be put in the black list, but will remain in the grey list i.e. the country is given more time to implement effectively the global illicit financing watchdog’s 27 recommendations about the anti-money laundering and combating financing of terrorism (AML/CFT) mechanism.
On Monday, the PSX witnessed bullish trend and closed at 40,276.93 points after gaining only 33.67 points (0.08 %). A total of 99,965,470 shares were traded compared to the trade 117,597,500 shares during the previous day, whereas the value of shares traded during the day stood at Rs4.378 billion as compared to Rs3.772 billion during last trading day.
Since mid-January, investors have been adopting 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 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.