Pakistan’s stock market sentiments are expected to be linked with the materialization of the International Monetary Fund (IMF) program when the market reopens after the Eid holidays. The market remains closed until April 25, 2023, for Eid-ul-Fitr celebrations.
According to analysts at Arif Habib Limited, while Saudi Arabia and UAE have given assurances to help fund the balance of payments gap, Pakistan still needs around USD 3 billion in commitments from multilateral or other friendly countries. The materialization of these commitments will help put the IMF program back on track, thereby aiding the sentiment at the index.
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The benchmark KSE-100 of the Pakistan Stock Exchange (PSX) is currently trading at a PER of 3.8x (2023), which is lower than the Asia Pacific regional average of 11.5x. Additionally, the market offers a dividend yield of 11.3%, much higher than the regional average of 3.0%.
The market opened on a positive note when the government announced that the UAE committed to a loan of USD 1 billion. However, the IMF still seeks necessary financial assurances from other multilateral organizations to restart the program.
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Pakistan has shared its revised plan to bridge the gap of USD 6 billion, and the country posted a current account surplus of USD 654 million in March 2023, marking its first monthly surplus since November 2020. The PKR appreciated against the USD, closing the week at 283.5/USD, which is up by 0.33% WoW.
Sector-wise, the positive contributions came from Fertilizer, Commercial Banks, Power Generation & Distribution, Oil & Gas Exploration Companies, and Tobacco, while Technology & Communication, Miscellaneous, and Insurance sectors contributed negatively. Scrip-wise positive contributors were ENGRO, DAWH, BAHL, HUBC, and UBL, while SYS, PSEL, AICL, MUREB, and LUCK made negative contributions.
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Foreigners sold USD 0.3 million worth of shares, compared to a net buy of USD 1.4 million in the previous week. On the local front, Banks and DFIs made a buying of USD 5.5 million, followed by Individuals at USD 1.6 million. The average volumes arrived at 105 million shares, which is up by 26% WoW, while the average value traded settled at USD 13 million, up by 74% WoW.
In conclusion, Pakistan’s stock market is closely tied to the IMF program’s materialization, and any financial commitments from multilateral or friendly countries will boost the market’s sentiment post the Eid holidays.
