Pakistan stock mkt.... in complete dooldrums

[blueazure]

as a regular trader in psx, i can confirm the following ;-


1. index ( the cumulative market cap of companies ) aka the 'money' in the stock mkt has been falling since aug 18' . index is hovering around 31k support from the 45k level last year in august

to summarize , money is exiting the system .

2.volumes are at an all time low

trade volume, ( the number of stock being traded daily ) was around 250 - 300 million per day in 2017 .

its barely 100 million these days . foreign buying is non existant


reasons= inflation, dollar hike, uncertainty



mkt is in firm bear grip and is expected to fall another 4-5k points to settle around 25k .

could be a good buying time if we are left with any economy so as to speak

 

[H!TchHiker]

@BHarwana where are you ...Our resident expert...OP is saying market is going down ...We need your opinion

 

[El Sidd]

I Think PTI and their allies are making the most money out of the plight of pakistani people.

They are only continuing the legacy of their mirror image parties like MQM,PMLn,PMLq,PPP and JI and JUIF.

They are all one family against people of Pakistan

 

[war&peace]

@BHarwana where are you ...Our resident expert...OP is saying market is going down ...We need your opinion

I have not seen Bharwana for quite some time... I hope he is fine..

 

[H!TchHiker]

I have not seen Bharwana for quite some time... I hope he is fine..

Yes hope so..no activity from his side ...

 

[Zulfiqar]

Yeah nobody gives a f*** w.r.t psx nowadays.

The reason being that it does not represent pakistani businesses fully. Consider the market cap of all the companies listed on PSX vs market cap of all the businesses whether in form of listed/unlisted LTD cos, partnership concern or sole prop forms.

Majority of the businesses are not in form of companies but in form of sole prop/partnership businesses due to taxes.

No one will be interested in raising capital via PSX unless you remove this tax arbitrage.

Coming to present PSX index. It is a mess for short term traders/speculators but we have to ask these questions.

How many of these companies are actually posting losses?

Is there a deviation between the prevailing market value and calculated market value based on price to earning and other relevant benchmarks/ valuation models. What is the actual reason behind it.

If we can't explain the deviation on fundamental basis then it is just market speculation and the price will not be low for long as the underlying company is still profitable.

Right now it is better to not invest in the whole index but selectively go long on blue chips that has a decent free float and keep the rest invested in cash equivalents.

Look through the past reports of mutual funds from 2007-2013 if available. See how did they do asset allocation during that time w.r.t the index trend and what was the result of it.

 

[Verve]

95%+ population has sod all to do with stock market so whatever happens it only affects the gamblers and stupid with money investing in short term trading!

 

[Dil Pakistan]

as a regular trader in psx, i can confirm the following ;-


1. index ( the cumulative market cap of companies ) aka the 'money' in the stock mkt has been falling since aug 18' . index is hovering around 31k support from the 45k level last year in august

to summarize , money is exiting the system .

2.volumes are at an all time low

trade volume, ( the number of stock being traded daily ) was around 250 - 300 million per day in 2017 .

its barely 100 million these days . foreign buying is non existant


reasons= inflation, dollar hike, uncertainty



mkt is in firm bear grip and is expected to fall another 4-5k points to settle around 25k .

could be a good buying time if we are left with any economy so as to speak

I think you are being conservative with the "real truth" - which you know already.

 

[Sine Nomine]

Fake Fake Fake we don't have any Stock market.

 

[Rasengan]

In general, the stock market is a good reflection of the economy. Its a leading indicator which gives a clue what to expect in the future. This is bad news for Pakistan. Daily Volume has decreased by a third, which means the smart money has no confidence to accumulate. This has most likely occurred because the fundamentals aren't good.

 

[valkyr_96]

In general, the stock market is a good reflection of the economy. Its a leading indicator which gives a clue what to expect in the future. There this is bad news for Pakistan.

For that you need well functioning markets. PSX is not even close to functioning. The free float of companies is so low that forget small investors even mutual funds do not have a say in company management. Also the market cannot stand short-selling because the index will climb down even faster. Why? because the stock prices are and were bloated(Amnesty Scheme>PSX>Div out white money) and are not based on expectations but demand and supply forces.

 

[Verve]

In general, the stock market is a good reflection of the economy

Only when a large portion of public has invested in stock.

But when 95%+ population doesn't invest in stock then it's not the reflection of the economy.

 

[Rasengan]

For that you need well functioning markets. PSX is not even close to functioning. The free float of companies is so low that forget small investors even mutual funds do not have a say in company management. Also the market cannot stand short-selling because the index will climb down even faster. Why? because the stock prices are and were bloated(Amnesty Scheme>PSX>Div out white money) and are not based on expectations but demand and supply forces.

True. But as a market technician who follows Elliot Wave Theory (growth theory) and the Wyckoffian model (Smart Money) I look at things differently. The PSX has five key features as mentioned by RNE which can allow a trader to record and chart wave patterns. The Stock Market is a good reflection of the economy since it reflects human behaviour (business). By volume decreasing a third on the daily is a telltale sign the smart money has no interests and would rather risk their investment elsewhere. These things occur, economies like businesses are cyclical.

 

[El Sidd]

In general, the stock market is a good reflection of the economy. Its a leading indicator which gives a clue what to expect in the future. This is bad news for Pakistan. Daily Volume has decreased by a third, which means the smart money has no confidence to accumulate. This has most likely occurred because the fundamentals aren't good.

bunch of vultures sit there to trade near to death slaves.

 

[Jugger]

when the chips are down.....