Pakistan Stock Exchange Sees Volatile Week Amid Government Formation

By Muhammad Haris

Pakistan Stock Exchange during the outgoing week received a volley of buying and selling with the index recording paltry movement where all eyes focused on the formation of the government which aimed to boost investors’ confidence and business climate.

During the week domestic currency closed at 279.28 against the dollar strengthened by Rs 0.13 or 0.05% every week. Pakistan Stock Exchange: KSE 100 index down 273 points

PSX closed at 62,944 points, declining by 59 points or 0.09 percent on a week-on-week basis.

The index recorded a heavy slide on Friday following the Feb 8 elections where the general perception was that a single party might win by comfortably taking a position in the center.

However, as the outcome went against the investor’s opinion, the index nose-dived it recovered before the close on fresh buying.

The foreign buying was witnessed during the outgoing week which has been shortened to three sessions because of Kashmir Day and Election Day, clocking in at $5.7 million compared to a net sell of $9.7 million last week.

Major buying was witnessed in Exploration & Production amounting to $4.9 million and Commercial Banks $1.2 million. On the local front, selling was reported by Mutual Funds amounting to$5.5 million followed by Other Organizations $1.2 million.

Average volumes arrived at 306 million shares (down by 2.3 percent every week while the average value traded settled at $50 million (up by 21.7% compared to the preceding week.

Tahir Abbas, head of research at Arif Habib said that in the forthcoming week, we anticipate clarity on the election result front with the emergence of election winner(s) and the subsequent formation of the government.

The market participants will closely monitor these developments for their potential impact on the market. “Moreover, given the current result season, specific stocks are expected to attract attention due to anticipated strong financial performance”, he said.

An analyst from AKD Securities said that the market outlook would hinge on the result of the elections, with indications pointing towards a PDM-like government.

If this transition occurs peacefully, it could be positive for the market as it would boost investor confidence, especially considering previous efforts by a similar setup, the same analyst said.

Overall, the market is currently at levels with attractive valuations, boasting a forward P/E ratio of below 4x.