PSX slides by 1.2 percent on foreign selling past week

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KARACHI:(Parliament Times)  Incessant foreign selling broke Pakistan Stock Exchange (PSX)’s bullish momentum in the outgoing week as the benchmark index, losing 556 points or 1.2 closed at 42,325 points. “The benchmark index oscillated in a thin range as gains were quickly retraced in on account of incessant foreign outflows coupled with uncertainty vis-à-vis politics, Fed Rate hike, Pakistani Rupee devaluation and implications of new administration in the United States of America (USA),” said an analyst at Elixir Securities. “We expect local market to track the foreign flows as recent outflows have remained heightened. Cements are likely to gain traction after recent declined on the back of correction in coal prices.” Foreigners offloaded shares worth $34.10 million during the first four trading days of the week, in which $22.82 million was primarily absorbed by local individuals. Commercial banks retreated by 1.9 percent during the week on account of profit taking after a recent surge wherein banking heavy weights like Habib Bank Limited (HBL) and United Bank Limited (UBL) contributed 130.55 points and 95.81 popints respectively to the index decline. Hubco and Pakistan State Oil (PSO) too weighed on the index on account of their removal from MSCI Pakistan provisional index. Overall participation too remained weak as average daily volumes declined by 3 percent Week-on-Week (WoW) to remain on average at 459 million shares. Foreigners with $34.10 million and companies with $0.62 million were net sellers during the first four trading days. “After stellar performance over the last few weeks, the KSE-100 Index took a breather amidst continuing foreign selling. Foreigners have continuously remained net sellers, with net $133 million worth of equities sold in 2016 till-to-date and $ 75 million of net selling observed during the last two weeks alone,” said Faizan Ahmed of JS Research. Local banks and Individuals remained major buyers, absorbing most of the foreign selling during the week with average volumes declining by 7 percent WoW to 459 million shares/day. Of the total activity seen during the week, overall activity remained concentrated in auto parts and accessories, cements on account of easing coal prices, and commercial banks with major activity in third tier banks.