Weekly Review: Bulls likely return on attractive levels

KARACHI: The stock market may witness bullish trends during the next week after bears dominated the current week, analysts said.

Analysts at Airf Habib Limited said expect that the market to remain positive in the upcoming weeks since valuations have opened up to attractive levels.

Moreover, the government intends to issue Rs200 billion Sukuks so as to address problems of power sector. Any development in this regard will serve as a positive trigger for the market. With foreign reserves and external accounts improving as well as stability on PKR/USD front, they expect foreign interest to revive.

The market commenced on a negative note this week, carrying the pressure from last Friday since Asia Pacific Group kept Pakistan on enhanced monitoring mechanism. Moreover, privatization commission’s decision to divest some portion of government’s stake in State Owned Companies such as OGDC, PPL, KAPCO and PAKRI kept the sentiment weak.

However, amendment in GIDC Act 2015, giving 50 percent waiver to Fertilizer, Chemical, Cement and Textile Companies, cushioned the dip. Albeit, the market closed at 29,672 points down by a massive 1,678 points (5.4 percent WoW).

Sector-wise negative contributions came from i) Oil & Gas Exploration Companies (519 points) ii) Commercial Banks (400 points), iii) Oil & Gas Marketing Companies (160 points), iv) Cement (139 points), and v) Power Generation & Distribution (216 points). Scrip-wise negative contributions were led by OGDC (247 points), PPL (193 points), HBL (134 points), BAHL (79 points) and PSO (63 points).

Foreign buying was witnessed this week clocking-in at USD 0.97 million compared to a net sell of USD 4.97 million last week. Buying was witnessed in Commercial Banks (USD 2.5 million) and Technology and Communication (USD 1.0 million).

On the domestic front, major selling was reported by Mutual Funds (USD 13.5 million), however Individuals remained net buyers of USD 7.8mn. Average Volumes settled at 124mn shares (down by 29 percent WoW) while average value traded clocked-in at USD 29 million (down by 23 percent WoW).

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