Author: Faisal Shahnawaz

KARACHI: The stock market likely to witness positive sentiments during the next week owing to expected outcome of Prime Minister Imran Khan’s visit to China.

Analysts at Arif Habib Limited said that a number of positive announcements are expected as an outcome of PM Khan’s visit to Beijing which is likely to greet developments in textile, Information Technology, defense manufacturing & engineering sector coupled with trade enhancement and balance of payment support, which will keep positive sentiment in the bourse upbeat going forward.

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Moreover, corporate results’ spell will be carried forward in the forthcoming week too with investors hope of strong earnings growth coupled with attractive dividend payouts, directing the market in the green zone.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.2x (2022) compared to Asia Pac regional average of 13.8x while offering a dividend yield of 8.5 per cent versus 2.4 per cent offered by the region.

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In the week commencing 31st January 2022, KSE 100 index made a shift to green territory adding 296.77 points to the index level.

The positive momentum was mainly driven by investor’s anticipation of approval of USD 1bn disbursement by IMF executive board under Extended Fund Facility (EFF).

Bullish momentum expedited further owing to investor’s optimism with respect to forthcoming healthy corporate results. The market also welcomed USD1 billion proceeds from the issuance of international Sukuk bonds in the midweek.

READ MORE: Stocks climb up 445 points ahead IMF announcement

Oil prices, which is hovering at its 7-years high, kept the buyers’ interest alive in the E&P sector throughout the week. However, bears were seen breaking the 3-day positive streak of the bourse on second last day of the week owing to general profit taking.

The market closed at 45,910 points, gaining 832  points (up by 1.85 per cent) WoW.

Sector-wise positive contributions came from i) Commercial Banks (189 points), ii) Fertilizers (132 points), iii) Oil & Gas Exploration Companies (127 points), iv) Oil & Gas Marketing Companies (92 points), and v) Textile Composite (69 points).

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Whereas, sectors which contributed negatively were i) Technology & Communication (26 points), ii) Power Generation & Distribution (5 points) and iii) Automobile Assembler (4 points). Scrip-wise positive contributors were HBL (60 points), FFC (52 points), BAHL (51 points), OGDC (51 points) and PSO (50 points). Meanwhile, scrip-wise negative contribution came from TRG (18 points), SYS (17 points) and HUBC (12 points).

Foreign selling continued this week, clocking-in at USD 4.42 million compared to a net sell of USD 4.0 million last week. Major selling was witnessed in Technology (USD 2.0 million) and Commercial Banks (USD 1.7 million). On the local front, buying was reported by Other Organizations (USD 3.9 million) followed by Mutual Funds (USD 3.0 million).

Average volumes clocked-in at 289 million shares (up by 54 per cent WoW) while average value traded settled at USD 55 million (up by 43 per cent WoW).

READ MORE: KSE-100 index gains 297 points