Weekly Review: positive sentiment to prevails in equity market on expected Saudi investment deal

KARACHI: Positive sentiments likely to prevail in the equity market during next week owing to scheduled visit of Saudi Crown Prince Mohammad Bin Salman on February 16, 2019 and may sign investment deal.
Analysts at Arif Habib Limited said that with all eyes set on the Saudi Crown Prince Mohammad Bin Salman visiting Pakistan on February 16, 2019 and reportedly signing trade deals amounting $18 billion, positive sentiment amongst investors is likely to prevail.
Moreover, foreign inflows are anticipated to continue keeping in view the government’s efforts to revive the economy and attract Foreign Direct Investment.
Therefore, they expect the market to remain positive next week.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) continued its positive stride this week.
With the government taking stringent measures to deal with the external debt and current account deficit, foreign investors’ confidence in the local bourse has been restored.
A surprise rise in the policy rate by 25 basis points by SBP did not adversely affect the bullish momentum either.
Moreover, forex reserves have surged by 12 percent WoW, on the back of funds received from UAE and Saudi Arabia of $1 billion each.
The market gained 848 points this week with the index closing at 41,113, up by 2 percent WoW.
Sector-wise positive contributions came from i) Commercial Banks (234 points) amid hike in policy rate, ii) Oil & Gas Marketing Companies (129 points), iii) Automobile Assembler (83 points), iv) Oil & Gas Exploration Companies (74 points), and v) Cement (72 points).
On the flip side, sectors that contributed negatively include i) Tobacco (-41 points) and ii) Automobile Parts & Accessories (-5 points). Scrip-wise top performers were PPL (79 points), BAHL (64 points), PSO (50 points), LUCK (43 points) and MCB (39 points).
Foreign buying continued this week clocking-in at $12.3 million compared to a net buy of $17.0 million last week.
Major buying was witnessed in Commercial Banks ($7.7 million) and Exploration & Production ($1.7 million).
On the domestic front, major selling was reported by Mutual Funds ($5.3 million) and Companies ($4.0 million). Volumes during the week settled at 175 million shares (up by 4 percent WoW) whereas value traded arrived at $49 million (down by 6 percent WoW).
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