Pakistan Stock Exchange witnessed heavy pressure during the outgoing week due to prevailing political situation and foreign outflows selling. The benchmark KSE-100 index declined by 2,668.36 points or 5.4 percent on week-on-week basis and closed at 46,858.56 points. Average daily trading volumes increased by 6.7 percent to 255.46 million shares as compared to previous week's average of 239.35 million shares. Average daily trading value however decreased by 8.4 percent to Rs 10.76 billion.
Total market capitalization declined by Rs 495 billion to Rs 9.364 trillion. The foreign investors remained net sellers at shares worth $9.49 million this week against an accumulation of $14.04 million registered in the prior week An analyst at AKD Securities said that the market dived into the red zone on political spillover from Prime Minister Nawaz Sharif being summoned for appearance before the Panamagate JIT. Remaining volatile, the KSE-100 index declined 5.4 percent on week-on-week basis to 46,859 points to wipe out last week's gains. In market related news, the NA passed the Finance Bill, 2017 providing clarification that flat rate for CGT will be applicable to shares traded with effect from July 01, 2017 with key amendments including reduction of dividend tax from 12.5 percent to 10 percent for mutual funds, reduced GST on feed gas and LNG used by fertiliser companies to 10 percent and 5 percent respectively from 17 percent and GST on supplies to unregistered person reduced to 1.0 percent from 2.0 percent for five export-oriented sectors.
An analyst at JS Global Capital said that the outgoing week witnessed another spell of profit taking ahead of political bout between PM Nawaz Sharif and the Joint Investigations Team (JIT). Clouds of political uncertainty deterred investors from taking fresh positions in equities. Moreover, after a week of strong foreign portfolio inflows of $14.1 million, foreigners chose to stay on the sidelines during the outgoing weak with net selling of $9.5 million. Local institutional investors also continued to offload position with net selling of $10.0 million. Key losers during the week included oil & gas (down 10.1 percent), Gas Utilities (down 8.5 percent), construction and materials (down 5.1 percent), whereas one of the key gainers during the week was the tobacco sector.
An analyst at Arif Habib Limited said that the market opened for the week with a negative sentiment, panicking over the weekend news that the Prime Minister was due to appear before the Joint Investigation Team (JIT), as part of the on-going Panama case. Stocks were hammered on Monday as the benchmark index plunged over 1,950 points in intra-day trading. While the market showed signs of recovery on the very next day, closing 399 points higher than the previous close, the negative sentiment dominated for the rest of the week where the market closed in the red all three days; in total losing 2,668 points during the week to close at 46,859 points (down 5.4 percent). Sectors dragging the index into the 2,668 points plunge were Oil and Gas Exploration Companies (down 546 points), followed by Fertiliser (down 384 points), Commercial Banks (down 304 points), Oil and Gas Marketing Companies (down 282 points) and Cement (down 271 points). Scrip wise OGDC (down 229 points), PPL (down 159 points), ENGRO (down 153 points) and HUBC (down 129 points) remained the leading losers, whereas HBL (up 30 points) and PAKT (up 12 points) were the only two meaningful positive contributors for the week.
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