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Stock market likely to perform better due to amnesty scheme, IMF talks
A sign of the Pakistan Stock Exchange is seen on its building in Karachi, Pakistan January 11, 2016. REUTERS/Akhtar Soomro/File Photo

Stock market likely to perform better due to amnesty scheme, IMF talks

KARACHI: The stock market likely to perform better during next week owing to launching of new amnesty scheme and progress on IMF bailout package.

Analysts at Arif Habib Limited said that the market to turn positive in upcoming days with triggers including amnesty announcement and agreement with the IMF (principal agreement has been reached but staff level arrangement remains pending).  Moreover, budget proposal will continue to flow in and keep certain sectors under limelight.

The analysts said that this week the market winds blew in all directions, with the benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closing in green on 3/5 days and ending the week at 37,338 points (down by 184 points, 0.5 percent WoW).

While low GDP forecast by the IMF and cement price cut mid-week in North and South ruined market sentiment initially, growth in remittances, positive outcome of the Finance Minister’s meeting with World Bank and IMF in the US, anticipation of another Amnesty Scheme together with talks of cement price restoration by cement manufacturers, revived the colour of the market. The analysts also highlighted that the market fell below its 3-year low this week.

Negative sector-wise contributions came from i) Cement (209.9 points) as news of cement players cutting prices eroded investor confidence, ii) Oil & Gas Exploration Companies (63.7 points), iii) Fertilizer (39.1 points), iv) Textile Composite (19.3 points), and v) Pharmaceuticals (18.6 points).

On the flip side, sectors that contributed positively include i) Power Generation & Distribution (73.4 points), ii) Commercial Banks (72.2 points), iii) Oil & Gas Marketing Companies (20. points), iv) Food & Personal Care Products (11.8 points), and v) Automobile Assembler (11.7 points). Scrip-wise major negative contributions came from LUCK (60.7 points), FCCL (36.1 points), and DGKC (35.7 points).

Foreign selling continued this week clocking-in at USD 2.2 million compared to a net sell of USD 3.7 million last week.

Selling was witnessed in Commercial Banks (USD 4.0 million) and Power Generation & Distribution (USD 0.7 million). On the domestic front, major buying was reported by Banks / DFIs (USD 4.0 million) and Companies (USD 3.6 million).

Volumes settled at 148 million shares (up by 25 percent WoW) while value traded clocked in at USD 34 million (up by 36 percent WoW).