FATF controls mood of investors, forcing PSX to move in narrow band

KARACHI (Monitoring Desk): Pakistan Stock Exchnage (PSX) continued to swing back and forth during the week driven by a mixed bag of developments on both global and local fronts where major index drivers landed in the negative territory.

The development on global horizon where concerns regarding Pakistan s possible inclusion in global terrorist financing watch list by Financial Action Task Force (FATF), and Nawaz Sharif has been disallowed by Supreme Court to hold the position of party head resulted in fresh selling in blue chips and investment stocks.

The index closed with a loss of around 360 points or 0.83 percent to 43,267 points level. Foreign investors continued their selling streak with net outflow of 3.8 million dollars during the week, where major selling was observed in Banks and followed by Fertilizer sector.

There were potent moves in the oil and gas sector in general on expectations of Windfall Levy on the TAL block being reversed by the courts, after confirmation of significant oil and gas reserves in POL’s newly discovered field at Jhandial. With Pakistan Oilfields controlling 80 percent of the field, investor sentiments for the stock grew, allowing it to show a 5.88 percent increase week on week basis.

With political uncertainty still heavily prevalent and international pressure on the country growing, analysts and brokers have advised investors to maintain caution and focus on fundamentally strong blue chip stocks.