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Stocks close flat: Positivity in short working next week

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By S N Syed

KARACHI: Pakistan Stock Exchange (PSX) benchmark 100-Index closed almost flat during the outgoing week while next week will be a three-day trading week expected to remain positive. The week began on a negative note as investors lacked confidence on the outcome of ECC meeting regarding gas and electricity tariff hike.
With Ashura to be observed next Thursday and Friday, the coming week is expected to have three working days. The new government will announce amendments to the Finance Bill 2018-19 on Tuesday, which will dictate its economic policies for the future.
“A positive sentiment is most likely to prevail amongst the investors as a clear direction will be defined, which will help overcome economic challenges. Therefore, we expect the market to be positive,” said the weekly market analysis report of Arif Habib Limited.
The KSE-100 index remained uneven during the week, and closed at 40,920pts, up by 65pts week on week. Volumes during the week settled at 139mn shares (up by 0.2 percent week on week) while value traded arrived at $47m (up by 19pc week on week).
Foreign selling continued this week clocking-in at $26.1mn compared to a net sell of $9.9m last week. Selling was witnessed in Commercial Banks ($12.1mn) and Cement ($8.9m). On the domestic front, major buying was reported by Insurance Companies ($11.8m) and Mutual Funds ($10.6m).
Analyst Amreen Soorani at JS Research said lack of clarity on policies kept the local bourse range-bound in the outgoing week as the KSE-100 index closed a mere 0.2 percent higher from last week.
Furthermore, market witnessed some pressure during the week on the back of concerns pertaining to cut in Federal Public Sector Development Programme, increase in custom duties and regulatory duties through amendment in finance bill.
On the economic front, uncertainty over increase in gas and electricity prices persisted during the week as investors awaited official notification from govt. Moreover, with expectations of higher taxes and cut in PSDP, investors also await the new finance bill which is due to be announced next week, followed by IMF’s staff level team to arrive during the last week of the month.
Other major news: Auto sales fall six percent in two months, ECC again defers gas price hike decision, remittances jump 13.5 percent in July-August, ‘No plan to discontinue Rs5,000 note’,  FBR collects Rs547bn in tax on oil sales in FY18. Government likely to amend Petroleum Policy 2012, China agrees to finance $1.9bn Karachi Circular Railway and Prime Minister likely to make first foreign visit to Saudi Arabia next week.
Foreign exchange reserves of the State Bank of Pakistan (SBP) further plunged by $261m, touching $9.62b.
Sector-wise positive contributions came from Oil & Gas Exploration Companies (159pts), Fertilizer (55pts), Textile (37pts), Technology & Communication (31pts), and Power Generation & Distribution (25pts). Negative contributions came from Commercial Banks (207pts), and Automobile Assembler (35pts). Scrip-wise positive contributions were led by POL (54pts), DAWH (52pts), PPL (50pts), OGDC (45pts) and NML (30pts).

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