Stocks see mixed week on political, economic woes

KARACHI: The local bourse experienced a mixed trend during the outgoing week owing to various developments on the political and economic fronts, said Arif Habib Ltd.

Pakistan’s current account deficit for July amounted to $809 million, marking a significant drop of 36 per cent on a year-on-year basis. In July 2022, the current account deficit reached $1.26 billion.

Furthermore, the government raised over Rs2.1 trillion through the auction of treasury bills. Additionally, Pakistan received $6.49bn through its Roshan Digital Accounts (RDA). Moreover, foreign exchange reserves of the State Bank of Pakistan decreased last week by $125m to reach $7.9bn.

In addition, the rupee depreciated during the outgoing week against the dollar to close at Rs301 — a record low — after losing 1.7pc on a week-on-week basis. As a result, the benchmark index of the stock market settled at 47,671 points after declining by 547 points or 1.1pc from a week ago.

Sector-wise, negative contributions came from fertiliser (92 points), food and personal care products (80 points), cement (79 points), technology and communication (71 points) and pharmaceutical (41 points). Sectors that contributed positively were commercial banking (19 points) and oil and gas exploration (15 points).

The average daily volume arrived at 206m shares, down 11pc week-on-week. The average daily value traded settled at $28m, down 12pc from a week ago.

Foreign buying continued during the outgoing week and clocked in at $1.7m versus a net purchase of $2.4m a week ago. Major buying was witnessed in technology and communication ($0.8m) and commercial banking ($0.6m).

On the local front, selling was reported by individuals ($8.2m) and banks ($8.2m).

The average daily volume arrived at 232m shares, down 32.6pc from a week ago. The average value traded settled at $32m, down 36pc from the preceding week.

According to AKD Securities, the stock market is expected to sustain a positive outlook going forward. It’ll be driven by a series of favourable developments like fresh talks between the International Monetary Fund and the caretaker government as well as rising confidence shown by bilateral partners.

“Given the ongoing trend of significant currency devaluation, we recommend investors should consider investing in companies with revenue in dollars — technology and exploration and production,” it said. Another viable approach for investors will be to focus on companies that offer healthy dividend yields or strong valuations, it added.