Islamabad, (TLTP): Pakistan Stock Exchange is likely to perform better in the next week as hanging sword of Financial Action Task Force (FATF) to place Pakistan on its black list is over for at least four months, besides other good pieces of news.
The approval of the IMF’s third tranche, readiness of the Securities and Exchange Commission of Pakistan to accommodate the demands of PSX Stockbrokers Association in the Securities Brokers (Licensing and Operations) Regulations, 2016, announcement of the prime minister to keep the electricity and gas tariffs unchanged till next fiscal year, ban on export of essential food items to stabilize their prices in local market, massive cut in current account deficit and increase in reserves by central bank are likely to bear fruit for the PSX.
The conclusion of the US-Taliban peace talks and an expected signing of agreement by the end of this week are likely to push the market upward.
The plenary session of the Financial Action Task Force (FATF) convened to ascertain Pakistan’s status, which at present stays at its grey list, haunted the stock market throughout the last week; however, the end result for the bourse was not bad, as earlier feared, and the KSE 100 Index closed with minor increase of six points at 40,249.
The international watchdog that works to counter money laundering, extended the duration of the grey list it has placed Pakistan on for another four months to ensure the country gets enough time to adopt legislative measures to restructure its banking system in line with the best international practices.
Both local and foreign investors remained cautious throughout the week and the bourse witnessed range-bound trading. The volume of traded shares as well as number of trades remained well below the average. The deliberations of the government with the International Monetary Fund (IMF) staff over the release of third tranche, spread in coronavirus to multiple countries and rumors about hike in electricity and gas tariffs also made the investors cautious.
The data released by National Clearing Company of Pakistan Limited (NCCPL) showed that foreign investors offloaded stocks worth $8.57 million during the last week; albeit it was less than the amount withdrawn in the preceding week by almost $2.6 million.
The overall dip in international oil and gas prices due to coronavirus issue in China did not spare the local bourse and selling was witnessed in oil and gas exploration sector. This also affected the shares of oil and gas marketing companies, as overall oil production in the country witnessed a decrease of 10 percent in the first half of the current fiscal year.
The sector-wise contribution to the index upside was led by commercial banks, cement, textile composite, leather and tanneries, and automobile parts and accessories.
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