KARACHI: Pakistan stocks likely to trade in positive zone during the next week owing to expected transfer of IMF tranche under Extended Fund Facility (EFF).
Analysts at Arif Habib Limited said that with IMF and Pakistan meeting scheduled in the coming week, it is expected that IMF will approve the $1.17 billion tranche enabling the disbursement within a week or so.
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Albeit, we expect the market to be positive in the upcoming week. Keeping in view the ongoing result season, some sectors and scrips are expected to stay in the limelight.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.2x (2023) compared to Asia Pacific regional average of 12.7x while offering a dividend yield of 9.6 per cent versus 2.7 per cent offered by the region.
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The market commenced on a negative note on the back of concerns over new tax measures taken by the government to increase revenue collection.
However, the investor sentiment revived after SBP kept the policy rate unchanged. Moreover, the momentum further strengthened after Qatar announced plans to invest $3 billion in various commercial and investment sectors, while Saudi Arabia pledges to invest $1 billion.
In addition to this, the latest figures released by the State Bank of Pakistan (SBP) this week shows, current account deficit during July 2022 shrank by 45 per cent MoM to $1.21 billion. However, the market turned negative again after the Pakistani Rupee (PKR) depreciated against USD, closing the week at PKR 220.66 (down by PKR 6.00|2.8 per cent WoW).
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Whereas, SBP reserves fall by $87 million, to settle at $7.8 billion. With the anticipation of the re-imposition of sales tax on petroleum products, the nervousness with regards to inflation re-surfaced.
Hence, the market closed at 42,592 points, shedding 679 points (down by 1.57 per cent) WoW.
Sector-wise negative contributions came from i) Banks (143 points), ii) Miscellaneous (138 points), iii) Power (101 points), iv) OMCs (80 points) and v) Chemical (59 points).
Whereas, sectors which contributed positively were i) Fertilizer (70 points), and ii) Cement (28 points). Scrip-wise negative contributors were PSEL (137 points), HUBC (104 points), PSO (79 points), HBL (48 points) and TRG (48 points). Meanwhile, scrip-wise positive contribution came from LUCK (75 points), SYS (35 points), TGL (26 points), FFC (25 points) and POL (19 points).
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Foreigners selling continued this week, clocking in at USD 1.9 million compared to a net sell of USD 2.8 million last week. Major selling was witnessed in Commercial Banks (USD 3.7 million) and E&P (USD 0.7 million). On the local front, buying was reported by Banks/DFIs (USD 4.1 million) followed by Individuals (USD 3.8 million). Average volumes clocked in at 250 million shares (down by 52 per cent WoW) while average value traded settled at USD 37 million (down by 35 per cent WoW).
