KARACHI: Stocks took investors on a roller-coaster ride in the outgoing week with market starting off on a positive note then going into steep decline midweek, before rallying to rise in the final session. All of that resulted in showing a slight change in the KSE-100 index which slid by 45 points (0.1 per cent) to settle at 37,292.

The market itself was extremely volatile as investors’ sentiments changed between hopes and apprehensions on news flow. Negotiations held with International Monetary Fund in USA during the last weekend initially generated activity, but participants remained at a loss to learn the IMF’s bailout amount and disbursement of first tranche.

Moreover, delays in amnesty scheme and consultations on implementing the treasury single account (TSA) to consolidate government deposits in central bank overshadowed the positives of progress in IMF talks.Banking remained in sharp focus as reports of SBP clarification on TSA implementation after taking all stakeholders on board provided relief to investors in the sector’s stocks. Since Bank of Punjab (-7.3% WoW) and National Bank (-1.1% WoW) account for a significant portion of government holdings, they were more sensitive to TSA compared to other banks and declined 7.3pc and 1.1pc, respectively.

The main event during the week was the resignation of Finance Minister Asad Umar on Thursday, which created quite a furore. The index made heavy gains as investors reacted positively to the cabinet reshuffle and hoped that more clarity would emerge on the economic policies going forward.

Selling by foreigners continued with an outflow of $1.9m compared to a net sell of $2.2m in the preceding week. Selling was witnessed in exploration and production at $5.3m and oil and gas marketing companies $0.4m. On the domestic front, major buying was reported by companies at $4.6m and individuals $2.3m.

The average daily volume was up 19pc over the preceding week at 176m shares while the average value traded clocked in at $39m, higher by 16pc.

Amongst major performers, cable and electrical goods segment was up 2.0pc followed by auto assemblers. Within major sectors, cement was down 1.5pc on rumours of further weakness in cement retail price as expansions come online amid weak demand.

Scrip-wise major decliners were Philip Morris Pakistan, decreasing by 32 points, Bank Al Habib 29 points, Pakistan Tobacco 27 points and Bank of Punjab 24 points. On the other hand, positive contributions came from Fauji Fertiliser, higher by 78 points, United Bank 58 points, Pakistan Petroleum 37 points and Hub Power 36 points.

Going forward, analysts look at a mixed trend with the market direction to be determined by the traders’ views on replacement by a technocrat as the finance minister. Participants were likely to decide taking fresh positions on clarity over the details of final IMF package, amnesty scheme and expectations from the upcoming budget.

The results season could play a key role in improving sentiments. Major results of companies lined up for the next week are Engro Polymer and Chemical, Pak Suzuki, United Bank, MCB, Habib Bank, Maple Leaf Cement, Engro Corporation, Cherat Cement and Indus Motor Company.

Published in Dawn, April 21st, 2019