Mettis Global News
Mettis Global News
Mettis Global News
Mettis Global News

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PSX Investors to exercise caution as Nawaz Sharif returns to face jail charges

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100 Index had a relatively better session yesterday as it closed up by +288.36 points with a traded volume of 59.10 million at a value of Rs. 3.99 billion. The index succumbed to bearish sentiment during early hours, however, bulls took control after the Supreme Court delayed proceedings on former President Asif Zardari’s money laundering cases to post elections injecting much needed stability in the market. The cases currently under investigation by the Federal Investigation Authority (FIA) alleged United Bank, Summit Bank and Sindh Bank Limited to launder money with the use of illegal accounts for Mr. Asif Zardari and other businessmen. Autos, banking and Fertilizer remained in the limelight.

Investors are expected to remain cautious and observant of the political atmosphere, as ousted Prime Minister Nawaz Sharif and his political heiress Maryam Nawaz are expected to return and face jail today. With numerous rumors filling the markets, political analysts anticipate things to get ugly as the disgruntled PML(N) leader will show his political might. 

Owing to the elections during the last week of July, State Bank of Pakistan will announce the Monetary Policy Statement on 14th of July. The SBP will announce the statement via a press conference where the market analysts anticipate 100 basis points raise in the policy rate keeping in view the dollar depreciation and inflation.

Fertilizer, Commercial banks led the way yesterday as the market anticipates another policy rate increase in the Friday’s announcement. Gains in the banking sector were led by Meezan Bank (MEBL +4.72%) and Askari Bank Limited (AKBL +4.97%) whereas United Bank Limited (UBL) was down -0.16%. Fertilizer continues to remain investors favourite amid positive future outlook and attractive valuations following the political instability in the market.

Furthermore, the SBP in its quarterly report highlighted that Pakistan is unlikely to achieve the growth target of 6.2% in the current fiscal year as numerous challenges face the economy.

According to reports by Pakistan Auto Manufacturers’ Association monthly sales data, auto sales during the month of July went down by 15 percent month on month. However, the sales were up by 21 percent year on year. The dip came due to a variety of reasons which includes rising car prices from across the manufacturers, government’s reluctance to allow non-tax filers from buying cars and rising oil prices. Honda (HCAR) sales dipped 14.7% month on month as demand for expensive Civic model continues to fall. Honda has raised prices twice during the fiscal year 2018. Continuing the trend, Pak Suzuki Motors (PSMC) sold only 10,344 vehicles, down 11.2% month on month. It sold 144,070 units during fiscal year 2018 as compared to 114,044 units in the same period last year. Cultus, Swift and Ravi were the worst performers of the year as its sales dipped 22.9%, 5.8% and 5.3% respectively. The Japanese market leader has recently announced its plans to discontinue Mehran VX production from November onwards. PSMC has also revised the prices of its different vehicles three times during fiscal year 2018.

Posted on: 2018-07-13T09:17:00+05:00

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