Summary The stock market recorded an increase of 0.5 percent or 194 points to close at 41401 points.
KARACHI (Dunya News) - Pakistan Stock Exchange (PSX) recorded a recovery during the outgoing week, stalling the four weeks continuous decline over the Habib Bank settlement with the Department of Financial Services (DFS) of New York State.
The stock market recorded an increase of 0.5 percent or 194 points to close at 41401 points.
The settlement reached between the New York State Department of Financial Services and Habib Bank Limited (HBL), where the bank has agreed to pay a fine of $225 million as opposed to initial suggestions of $630 million which helped restored the sentiments of the seasoned investors.
READ: Habib Bank to pay $225 million New York fine for compliance failures
However, activity continues to remain thin, with average trading volumes of 136 million shares/day and average traded value amounted to average $76million/day. On a positive note though, foreign selling somewhat abated with offshore investors recording net selling of only $0.3 million during the week.
Key laggards which halted any big rally were (1) Cements (down 0.3 percent on week on week basis) on concerns over pricing arrangement and (2) Textiles (down 1.2% down 0.3 percent on week on week basis) as hopes for near-term local currency devaluation fizzles out.
Apart from this, key highlights during the week were: (1) China saying there is no change in policy on Pakistan after BRICS showed concerns over terror outfits in Pakistan, (2) fiscal deficit ballooning to 5.8% of GDP during FY17, (3) foreign exchange reserves recording an increase of US$386mn to reach US$20.39 billion, (4) release of provisional FBR tax collection numbers (2MFY18 collection up 21% YoY to Rs448 billion) and (5) increase in prices of petrol by Rs2/litre.
An analyst from BMA Capital management expect market activity to pick up its pace to some extent in coming week as dissolution of uncertainty over index heavy HBL’s penalty could drive investors’ mood and continue with its current momentum.
Furthermore, earnings announcement by some big giants including Oil and Gas Development Co., and Pakistan Oilfields could also attract selective interest. On the other hand, investors’ concern on government’s role to address external account weakness and buildup in geo-political noise could limit any relief rallies.
(Reporting by Haris Zamir)
