Weekly Review: equity market to continue positive rally on foreign inflows

KARACHI: The equity market to continue its positive rally during the next week on the back of improved foreign inflows in the local bourse, analysts said on Saturday.

 

 

 

Analysts at Arif Habib Limited said that the market to continue its positive rally on the heels of improving foreign inflows in the local equity bourse.

“We expect the foreigners to remain net buyers during next week as well,” they added.

Moreover, a likely unchanged discount rate announcement in the upcoming monetary policy is also likely to keep the jubilance intact.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) accelerated by 958 points during the outgoing week and settled at 40,265 points, providing a week-on-week return of 2.44 percent.

The acceleration has been attributed to improved sentiment on account of the economic reforms package announced by the government.

The Finance Supplementary (Second Amendment) Bill, 2019 was broadly focused on improving ease of doing business, incentivizing export-oriented/industrial sectors and elimination of domestic growth hampering impediments.

A key demand from the stock market to abolish the advance tax of 0.02 percent was accepted, while the government also allowed capital losses to be carried forward for three years, thereby impacting the investor sentiment positively.

Various other measures (such as abolition of super tax for non-banking companies, withholding tax abolishment for filers on banking transactions) all contributed towards improving the overall confidence in the equity bourse.

Meanwhile interest from foreigners also propelled the market’s performance.

Positive contributions to the index were led by i) Commercial Banks (559 points), ii) Oil & Gas Exploration Companies (133 points), iii) Fertilizers (97 points), iv) Automobile Assemblers (66 points), and v) Power Generation and Distribution (66 points). On the flip side, major sectors under pressure remained i) Oil and Gas Marketing Companies (-24 points) and Insurance (-15 points). Scrip wise top contributors were HBL (232 points), UBL (142 points), MCB (79 points), PPL (76 points) and HUBC (61 points).

Foreign investors accumulated $17 million this week compared to a net sell of $9.4 million last week.

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