PakStox Outlook

PSX ended the week on a weak note. KSE100 Index lost 200 points about 0.5% on the last day of the trading week after having shown a strong upward move of +800 points yesterday. KSE100 Index closed at 43653 for the week. Down 2.02% since last week. In first two days of the week KSE100 Index lost close to 3.78%, as Mutual Funds sold massively betting on worsening Ukraine crisis and national politics. Scheduled MPC on 2nd day of the week may also have prompted Fund's selling as rates in the secondary market were indicating a slight hike in policy rate. But in my opinion Funds have almost exhausted selling and are not facing much redemption pressure. The strong move up in the second last day of the week reflects that.  Selling from 'foreigners' was already largely over. In general PSX is in oversold state. Going forward PSX may find its own footing after having absorbed close tp $440mn of foreign selling last year. Had it not an eventful week both on national as well as inter...

US Inflation Rate at 7.9% is highest in last 40 years. Major contributors to inflation has been Energy and Food. US Bureau of Labor Statistics released data. See Pdf. The recent jump in commodities including energy prices as a result of Ukraine crisis, still has to make its way through the system. so brace for more. The broader Energy Index had increased by 3.5% in February i.e. before Ukraine invasion and its impact on Energy. This put Fed in a spot as at least 6 rate rise are have been asserted. But as markets remain in a whirlwind of geopolitical events next Fed raise in rates could be just 25bps despite sharp increase in inflation.

PSX was straight up today with very low volatility . KSE 100 Index closed at 43,854 up 1.88% adding 811 points. Market paid no heed to increasing rates in money market or political uncertainty. Trade data at the day end does not show substantial buying from any quarter. In fact 'foreigners' were net sellers of over $2.2mn - slightly higher than recent average. KMI30 was ended up 2.56% gaining 1754 points closing at 71,151. A number of Mutual Funds that only invest in companies that are compliant to a certain shariah Board are benchmarked to KMI30. Mutual Funds were just marginally net buyers today however. The substantial gain in KMI30 is probably indicates end of selling spree by Funds. Cement sector, where stock prices have reached a very low level, came for strong demand. The market capitalization of Cement Sector gained more than 5% today. This sector has seen intense selling pressure lately on increasing energy prices. Recent rise in retail price of Cement in the North r...

Intense speculative activity in commodities now turning bearish. Brent trading below $114 down more than 11% . Gold also down more than 3% losing $65.

PSX continued today its volatile behavior but with positive tone reflecting ease on yesterday's MPC maintaining rate.  KSE100 Index closed at  43,043 +164   points.  The KMI 30 index increased by 441 points closing at 69,396 reflecting Funds buying. Trading activity however reflected un ease with respect to political situation arising from no confidence move. The Ukraine crisis having a strong impact on commodities markets also remained a concern.  Looking at yesterday's and today's trading it appears that selling pressure has eased. In general this indicates market would be calm going forward if no major event affects the outlook.  Today's T Bill auction however dents MPC stand of maintaining the policy rate at 9.75%. Cut off yield increased 90 to 130bps. See tweet of topline . This may put pressure on PSX tomorrow. Today Finance Minister held a press conference and said that the Trade Deficit has declined on a monthly basis, dropping to $3.1 billion...

Brent trading above $130. Gold above $2040 . Disruptive behavior of Commodities market continues. Intense and insane level of speculative activity. There are talks about allowing Iran and Venezuela Oil in the market. So far there is no progress on that. There are also talks of Biden visiting Saudi Arabia for more Oil supply. In this tense situation however nothing might calm commodities and Oil till a settlement is reached in Ukraine and Russia is back in international economic system. KSE100 closed at    42,878 losing 388 points down -0.90%.  Trading activity was less than yesterday and a total of 93mn shares were traded on $29mn. Market had traded substantial part of the day in an orderly manner, But speculative pressure came in the end as news of no confidence move against PM materialized. There was no selling pressure from any quarter including 'Funds' despite that SBP Monetary Policy meeting was scheduled today. TRG that has major chuck of future open interest and a...

PSX bled today in tandem with all Asian markets (except GCC) as commodities shot up on worsening Ukraine situation as Brent shot past $130 (now at $123) and Gold touched $2000.  KSE100 closed at  43,267 down  2.88%   losing 1,284    points. Market had lost more than 1500 points but later recovered. Trading volume increased compared to last week and a total of 104.8mn shares worth of $36mn were traded. Interestingly 'Individuals' were massive net buyers today after quite some time. Mutual Funds as usual sold massively to the tune of $6.65mn. They sold across the board except Oil. Local Funds have been consistently major sellers in the market and have sold around $47.5mn worth of equities year to date.  My sense is that Funds are facing redemption pressures from corporate clients. Corporates poured huge amounts in Funds in 2015 to 2017 in a low interest rate environment when Pakistan equities were experiencing a major surge on general optimism and inclu...