Weekly Review: market to stay positive

KARACHI: The stock market likely to stay positive during next week but there are chances of profit taking, analysts said.

Analysts at Arif Habib Limited said that the market to remain positive in the coming week. However profit-taking cannot be ruled out.

Major developments next week include PM Khan’s visit to China aimed at reviving CPEC Projects and removing impediments.

The KSE-100 index is currently trading at a PER of 5.8x (2020) compared to Asia Pac regional average of 13.0x and while offering DY of ~9.4 percent versus ~2.5 percent offered by the region.

KSE-100 commenced on a positive note this week amid 1QFY19 tax collection being reported at 90 percent of the IMF target. Investors’ expectations seemed to reflect optimism with regards to the first quarter IMF targets being met.

Moreover news of increase in cement prices in the Northern Region as per PBS was the major driver for the Cement sector throughout the week.

Later in the week a meeting of business community with the Army Chief and PM Khan improved the sentiment further due to anticipation of remedial measures to address outstanding economic issues.

Despite decline in international crude oil prices the Oil & Gas Exploration scrips resisted pressure. The overall positivity in the investment climate was complimented by jubilant volumes. The KSE-100 index gained 962 points (up by 3.00 percent) WoW, closing at 33,033 points.

Sector-wise positive contributions came from i) Commercial Banks (231 points), ii) Cements (189 points), iii) Power Generation & Distribution (96 points), iv) Oil & Gas Marketing (93 points), and v) Fertilizer (68 points). Scrip-wise positive contributions were led by HBL (103 points), HUBC (52 points), ENGRO (51 points), DGKC (50 points) and NBP (50 points).

Foreign selling continued this week clocking-in at USD 4.7 million compared to a net sell of USD 8.8 million last week. Selling was witnessed in Commercial Banks (USD 4.6 million) and Food and Personal Care (USD 1.7 million).

On the domestic front, major buying was reported by Other Organizations (USD 4.9 million) and individuals (USD 4.4 million). Average Volumes settled at 223 million shares (up by 106 percent WoW) while average value traded clocked-in at USD 40 million (up by 58 percent WoW).

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