The KSE 100 index had a volatile day today. It opened down around 440 points, nearly dipping below 70,000, after crossing 71,000 intra-day yesterday. However, the market made a quick recovery and spent most of the day in positive territory. It closed just 150 points lower than yesterday's close.
Foreign Corporates were inactive at PSX today and ended the session with a small amount of net selling. In this month of April, their net buying is significant, about $14 million., which is 65% of the total year-to-date amount.
Local investors stepped up in the absence of foreign buying. Both individual investors and brokers emerged as significant net buyers.
Among local investors, individuals led the charge with over $2.55 million in net buying, followed by brokers at $0.955 million.
On the selling side, 'companies' were the top net sellers with over $1.3 million, followed by 'funds' with over $1.07 million. Interestingly, the redemption activity in funds suggests it might be institutional rather than individual investors.
The market momentum seems primarily driven by a return of foreign buying. After exiting two years ago, foreign investors are likely finding Pakistani stocks attractive due to the depreciated rupee.
Local investors, however, face a balancing act now. They are concerned about the overall economic situation (macroeconomic environment) and the market's rise fueled by foreign buying. The upcoming monetary policy meeting by the State Bank of Pakistan is unlikely to result in a rate cut. Additionally, dealing with the IMF may involve decisions on power rates and taxation, further impacting inflation.
In this environment we have to manage the 'teezi'. Good luck.
UBL announced first quarter result today. PAT increased by 12% but profit before provision increased by only 6%. Top line declined but the profit was boosted by gains booked in securities. Good interim cash dividend of Rs. 11 per share. see the note.
