LAHORE
The local investors continued to wait and watch ahead of the earnings season, citing political uncertainty as well as the absence of triggers, as volumes continued to remain dismal. According to stock market experts, lack of triggers and political uncertainty kept investors sidelined, leading to KSE-100 index fall by 302 points or 1 percent during last week.
Stock market expert and AKD Group chairman Aqeel Karim Dhedhi urged all the political parties to set aside their difference and jointly focus on national agenda as political unrest is impeding not only the stock market but also the national growth. “At a time when the country is facing various internal & external challenges and Pakistan Armed Forces are busy in operation to deracinate the menace of terrorism, political harmony is direly needed to support the govt instead of holding rallies against govt.”
He said that all political parties should follow the present government and join hands with the private sector to put economy back on rail. He said that opinion differences are part of the democratic system but all should be united on national interests that would give a good signal to the foreign investors who are planning to make investment in Pakistan.
Aqeel Karim said that the the PML-N government is leading the counter-terrorism strategy, as durable peace and stability in the region is prerequisite for high economic growth and development. The entire business community is standing united at the call of the government to flush out the terror from the region. There was no option left except launching military operation against terrorists as business community, importers and exporters suffered billions of dollars in terrorism spate in the country.
Aqeel Dhedhi said that business community of Pakistan has always played significant role at all disastrous and testing times. They should come forward and help their internally displaced brothers who are sacrificing for us and helping Pakistan Armed Forces to remove the menace of terrorism. He said that all the political forces should follow the suite and support govt for economic growth and public welfare of the country, aimed at achieving the economic goals.
To a question regarding performance of stock market during previous week, he said that average trading volumes stood at just 59.5 million shares traded per day, down by 44% over the previous week. He said the low number served as a stark reminder of the bleakest days of the KSE when volumes fell to extremely low levels during the Capital Gains Tax saga.
He said that investor sentiment was also hurt by the State Bank of Pakistan (SBP) delaying the monetary policy announcement July 12 to July 19. It is largely expected that the SBP will maintain status quo in this announcement, especially after the International Monetary Fund (IMF) highlighted that monetary tightening was required to curtail growing inflation numbers. Another contributing factor for the index’s lacklustre performance was the decline in foreign participation. Foreigners were net buyers of equity worth $8.2 million during the week.
On the macro front there were quite a few positives, but failed to make an impression on the market. The country’s foreign exchange reserves shot up by $647.6 million while remittances for the month of June 2014 clocked in at $1.5 billion, as compared to $1.2 billion.
Stock market expert, Wahaj Ahmed, stated that the government had finalised plans to complete the privatisation of the Oil and Gas Development Company by September 2014. The news comes on the back of a successful SPO of Pakistan Petroleum Limited and can be expected to keep OGDC’s stock in the limelight, he added. In the same way, Pakistan State Oil’s receivables continued to grow and stood at Rs181 billion.