Karachi, November 25, 2023 – Pakistan stocks likely to sustain positive momentum during next week starting November 27 owing to schedule meeting of the executive board of the International Monetary Fund (IMF).
Analysts at Arif Habib Limited foresee a continued positive momentum in Pakistan stocks during the upcoming week, commencing on November 27, 2023. This optimistic outlook is primarily attributed to the scheduled meeting of the International Monetary Fund (IMF) Executive Board on December 7, 2023.
The forthcoming week is expected to be crucial for investors as the country is set to release inflation figures, reflecting the impact of the recent surge in gas tariffs. The attractive trading levels of various scrips are anticipated to lure investors, with the benchmark KSE-100 Index of the Pakistan Stock Exchange (PSX) currently trading at a Price-to-Earnings Ratio (PER) of 4.5x (2024), compared to its 5-year average of 5.6x. Furthermore, it offers a dividend yield of 10.1 percent, surpassing its 5-year average of 7.8 percent.
The recent bullish trend in the market, culminating in a new high of 59,086 points, is attributed to several positive indicators. The October 2023 Current Account Deficit marked a significant YoY decrease of USD 91 million, totaling USD 74 million. This is notably lower than the October 2022 figure of USD 849 million. Additionally, the textile sector witnessed a 6 percent YoY growth in exports in October 2023, breaking a 13-month stagnation.
While the State Bank of Pakistan (SBP) experienced a decrease of USD 217 million in foreign exchange reserves, reaching USD 7.2 billion, the Pakistani Rupee (PKR) strengthened against the US Dollar, closing at 285.37, appreciating by 1.12 percent week on week (WoW).
The market closed the week at 59,086 points, marking a robust increase of 2,023 points or +3.5 percent WoW. Sector-wise positive contributions were led by Commercial Banks (960 points), Fertilizer (247 points), Technology & Communication (182 points), Glass & Ceramics (89 points), and Miscellaneous (89 points). Conversely, negative contributions came from Chemical (10 points), Refinery (9 points), Insurance (4 points), and Tobacco (2 points).
Scrip-wise, positive contributors included MEBL (221 points), BAHL (145 points), SYS (135 points), FFC (114 points), and MARI (99 points). Negative contributions were observed from OGDC (73 points), RMPL (25 points), COLG (23 points), PPL (21 points), and UNITY (18 points).
Foreigner buying continued to play a significant role, recording USD 8.5 million in contrast to a net buy of USD 6.3 million the previous week. Major buying was observed in Banks (USD 2.3 million) and Fertilizers (USD 1.8 million). On the local front, selling was reported by Banks and DFIs (USD 5.0 million) followed by other organizations (USD 3.5 million). Average trading volumes reached 731 million shares, down by 4 percent WoW, while the average value traded settled at USD 74 million, marking an 11 percent WoW decrease.
As the market anticipates the IMF Executive Board meeting and economic indicators, investors remain watchful for potential opportunities in the dynamic Pakistani stock market during the upcoming week.
