NAB’s investigation fears keep stocks in check
KARACHI: The National Accountability Bureau’s (NAB’s) investigation fears against some influential brokers continued to haunt at the Pakistan stock market, keeping the index under selling pressure in the short days trading week.
The Karachi Stock Exchange (KSE)-100 index closed at 32,822.84 points, adding 61.89 points or 0.2% as compared to previous week’s closing at 32,760.95 points. The foreigners have remained consistently on the selling side, shedding positions worth $17.92 million in the current month totalling to a straight net outflow position in the last three months. The trading volumes reminded lackluster and went down by 8% Week on Week to 124 million shares/day.
“The market persisted on a dreary path amidst a lack of triggers, fear of scrutiny, continued foreign outflow and suppressed investor interest on account of a short work week,” said Habib Metro Financial Services’ analyst Muhammad Sultan.
Majority of the investors have opted to stay on the sidelines that triggered a sharp contraction in volumes. “The benchmark jump started on rumours of broker buying but it failed to create a meaningful difference as continued profit booking prevented a sustainable ascent. International crude kept playing hide and seek throughout the week with local exploration and productions’ names closely tracked international price developments in the commodity,” he added. He said the last leg of the week witnessed some buying interest in cements, largely on account of value buying on attractive price levels, however the bullish momentum proved largely short lived. “The volume leader chart was populated by a number of penny stocks in the outgoing week, as the main board was largely ignored by palpable investors. The market participants seemed content on waiting out the current run of volatility whereby a massive sell-off has not been seen as yet which indicates strong support at lower levels,” he added. The military establishment’s meetings in US in the silhouette of Prime Minister Nawaz Sharif’s visit to the UN may have some significant vibes to offer post holidays, helping to bring clarity on the horizon. “We expect the index to stay edgy in the short to medium term, trading in a narrow band with thin volumes,” he added.
He said the market is likely to take clues from the ongoing developments on the local investigation/corruption probe front, while continued weakness in global economy, unabated foreign outflow and numbed oil prices would keep all proceedings in check.
JS Research’s analyst Faizan Ahmed said shaky sentiments at the bourse kept the market range-bound amid lackluster volumes at the end of the week before the Eid holidays. “Overall lack of optimism due to fears of NAB investigations against high profile industrialists and brokers continued to hamper market performance despite upbeat corporate valuations,” he added.