Stocks rise in thin month-end trade

Stocks on Monday pulled off a positive close amid sporadic month-end trade as the political pandemonium continued to give investors cold feet.
Pakistan Stock Exchange’s (PSX) benchmark KSE-100 shares index gained 124.33 points or 0.30% to end at 41,264.66 points.
JS Research said the ongoing uncertain political situation kept investors from active market participation.
“We expect range-bound activity to continue and therefore recommend investors to wait for political clarity before availing this downside as an opportunity to build fresh positions,” JS analysts said in their market report.
Volumes shrank from 177.7 million shares to 97.5 million (-45.2% day-on-day), while average traded value plunged by -45.9% to $11.3 million against $20.9 million.
Stocks that contributed significantly to the volumes were WorldCall Telecom, G3 Technologies Limited, Silkbank Limited, K-Electric, and Cnergyico PK Limited.
As many as 332 companies were active in the session, of which 167 posted gains, 135 losses, and 30 remained unchanged.
Arif Habib Limited (AHL) said the PSX closed higher despite low investor participation.
“Rising political temperatures dried up the volumes in the mainboard as third-tier stocks continued to be the volumes leaders,” the brokerage said in its report.
Sectors that lifted the index included technology and communication (46.7 points), power generation and distribution (32.5 points), cement (21.5 points), exploration and production (16.2 points), and automobile assemblers (12.1 points).
Stocks up in October
According to AHL, the 100-Index remained range-bound in the outgoing month, closing at 41,265 points, up by 0.3% or 136 points.
Initial excitement at the bourse was led by the rupee’s noteworthy recovery — closing at Rs220 per dollar this month as compared to Rs239 per dollar in September — with Finance Minister Ishaq Dar vowing to tame inflation and control the parity.
Although, the momentum could not be sustained as Moody’s cut Pakistan’s sovereign credit rating from B3 to Caa1 due to increased risks related to liquidity and external vulnerability.
Moreover, a statement from US President Joe Biden casting doubts on Pakistan’s ability to protect its nuclear assets made headlines. However, a clarification by the White House later cleared some air.
ADB approved a $1.5 billion financing support under its BRACE programme. Pakistan was also taken off the Financial Action Taskforce’s (FATF) grey list in the month.
Depleting foreign reserves continued to pressure the rupee. Since the start of the PTI’s long march, the market has not moved much as investors await clarity on the political front.
Average volumes during October 2022 settled at 277 million shares, up 58% over September, while traded value swelled 25% to $36 million.
Foreign investors bought $14.6 million worth of equities in technology and exploration and production sectors, while net-selling of $4.8 million, $2.1 million, and $1.8 million was witnessed in banks, other sectors, and fertiliser sectors, the AHL report said.