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• Position: KSE-100 index loses 448 points

KSE-100 index loses 448 points over budget noise in the parliament

Summary

Gradually but consistently the inexperienced government of PTI has presented its full year budget 2019-20 last week. This week discussion on the budget was carried on in Parliament by the opposition and government. Accordingly, different aspects were highlighted both negative and positive which led to turmoil in the market affecting the KSE-100 Index which declined 1.26% WoW.

Investors are keen to see the passing of the Budget with all the deletions and additions to it so that the country could walk on its economic journey with clear economic targets and road map. The International Monetary Fund (IMF) approval on July 3 about its bailout package will further remove the uncertainty from the market. The market support fund did not materialized during the week.

During the week the market shed 448 points, being bearish for first three days but recovered/positive on last two days as the serious discussion emerged on budget issues later during the week. It is expected by the government that the budget will ultimately be passed as the attitude of opposition seemed to be reconciliatory, which is good sign for the country. The market which during the week dropped below 35,000 level finally closed above 35,000 level to 35,125.25 on Friday. The average market volume declined to 125m and the market capitalization was lowered by 87 billion to stand at Rs.7.064 trillion.

On Monday, the market snapped the four-day bullish rally and stocks lose 404 points to close at 35,168.82. It was volatile day as market went up 52.52 points and then dipped 462.22 points. Cement attracted investors on the news of increase in cement prices/bag on the back of recent hike of federal excise duty.

The KSE-100 lost 487 points on Tuesday as on political front where the government and the opposition were entangled in the National Assembly over the passage of Finance Bill 2019-20. The Index closed 34,681.72 and the average volume too declined to 104 million.

On Wednesday, the treasury and opposition agreed to carry out a debate in National Assembly over the budget lowered political temperature and the Index closed flat with decline of 25.60 at 34,656.12.

On Thursday, the three negative sessions turned positive and KSE-100 Index recovered 339.79 to close at 34,995.91 as political budget climate improved. The individual investors were encouraged for cherry picking and were buyer for $1.46m.

On Friday, the...