While the benchmark index of Pakistan Stock Exchange mostly
remained on upward trajectory during January 2017, various factors also plunged
it down. However, the month posted a nominal increase of slightly less than 2
percent. Though, the index breached 50,000 barrier it failed in sustaining this
level and the month closed at 48,758 points.
The factors keeping the market under pressure included: 1)
political volatility due to Panama case, 2) deteriorating economic indicators, 3)
apex regulator enforcing rules more stringently and 4) foreign investors
offloading their holdings. While foreigners remained net seller, local
investors bought at dips.
Barring Automobiles and Chemical, all other major sectors
posted flat returns. On top of that Oil & Gas and Commercial Banks ended in
the red. The performance of market was mainly led by second tier scrips. As
stated earlier, local participation remained robust, with average daily trading
rising to 443 million shares, a hike of 26 percent.
Foreigners continued to trim their holding as part of the
global strategy, with a net outflow of almost US$111 million during the month
under review, taking net outflow to a whopping US$409 million. Positions were
offloaded in Power Generation, Banks and Chemicals.
Going forward, the market is likely to take direction from
the ongoing results season where strong earnings growth by Banks, Cements and
Autos is likely to provide impetus to the market performance.
