Author: Faisal Shahnawaz

KARACHI: The stock market likely to stay in green during the next week owing to lower interest rate regime. Analysts at Arif Habib Limited said that the market to continue trading in green. The low interest rate regime and pro-growth stance of the State Bank of Pakistan (SBP) should keep equities attractive.

Moreover, as mentioned earlier the result season should keep cyclical in limelight while reduced provisioning, and healthy fee income/capital gains should help fuel banking earnings.

That said, COVID fourth wave is a concern which may keep sentiment jittery.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.7x (2021) compared to Asia Pac regional average of 16.1x while offering a dividend yield of 6.6 per cent versus 2.4 per cent offered by the region.

The domestic bourse closed the week in green this week. The investment climate took a major sigh of relief when the trade deficit posted a 16 per cent month on month decline as per Pakistan Bureau of Statistics (PBS) data.

With the USD 2.8 billion SDR allocation expected from the IMF, the reserves position is expected to consolidate further which is significantly positive given uncertainty over the external account outlook.

Moreover, the result season is ongoing and cyclical sectors are likely to post healthy earnings on a yearly basis driven by the V-shaped economic recovery. The index closed at 47,490 points, (up 435 points week on week).

Sector-wise positive contributions came from i) Commercial Banks (193 points), ii) Oil & Gas Marketing Companies (52 points), and iii) Chemical (52 points). Meanwhile, the sectors that contributed negatively majorly include i) Food & personal care (21 points) and Tobacco (7 points).

Scrip-wise positive contributors were MEBL (84 points), MCB (43 points), and HBL (41 points). Whereas, scrip-wise negative contribution came from LUCK (41 points), PSEL (36 points), and UNITY (19 points).

Foreign buying was witnessed this week of USD 3.1 million against a net sell of USD 5.4 million last week. Buying was witnessed in Technology (USD 1.8 million), Cements (USD 1.3 million) and OMCs (USD 0.2 million). On the domestic front, major selling was reported by Funds (USD 10.6 million) and Insurance (USD 6.1 million). Average volumes clocked-in at 455 million shares (up by 12 per cent week on week) while average value traded settled at USD 85 million (down by 5 per cent week).

KARACHI: The share market ended down by 151 points on Friday in narrow range trading during the day.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 47,489 points as against previous day’s closing of 47,640 points, showing a decline of 151 points.

Analysts at Arif Habib Limited said that the market largely traded in a narrow range and lost a total of 216 points.

Oil and gas marketing companies, Cement, Chemical, Refinery and Technology sectors continued seeing selling pressure from the previous couple of sessions.

LUCK saw a significant drop in the closing half hour, which brought its price below LDCP by a large margin.

Among scripts, PASL led the volumes with 66.9 million shares, followed by UNITY (35.5 million) and DSL (25.9 million).

Sectors contributing to the performance include Technology (-50 points), Cement (-34 points), Vanaspati (-25 points), Textile (-18 points), Banks (+28 points) and Glas (+21 points).

Volumes declined from 546.8 million shares to 499.7 million (-9 per cent DoD). Average traded value also declined by 11 per cent to reach US$ 83.5 million as against US$ 94.1 million.

Stocks that contributed significantly to the volumes include PASL, UNITY, DSL, WTL and FFL, which formed 36 per cent of total volumes.

Stocks that contributed positively to the index include MEBL (+21 points), GHGL (+21 points), BAFL (+11 points), MCB (+7 points) and INIL (+75 points). Stocks that contributed negatively include TRG (-32 points), UNITY (-25 points), LUCK (-20 points), SYS (-13 points) and HUBC (-12 points).