Weekly Review: Positive sentiments likely prevail in stock market

KARACHI: Positive sentiments likely prevail in the equity market during next week owing to inflows in debt market and stable exchange rate, analysts said.

Analysts at Arif Habib Limited said expect that the market to be positive in the upcoming weeks as sentiments should reflect improvement in foreign exchange reserves of the State Bank of Pakistan (SBP) and stable Pak Rupee/USD parity amid inflows in T-bills and narrowing Current Account Deficit (CAD).

Albeit, commencement of the financial result season in the coming week will keep certain scrips under limelight.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.6x (2020) compared to Asia Pac regional average of 12.5x and while offering DY of around 6.3 percent versus 2.7 percent offered by the region.

The market commenced on a negative note this week with investors resorting to profit-taking.

With coalition partners showing dissatisfaction over policies of the PTI-led government, lackluster momentum prevailed.

Furthermore, concerns over rising inflation kept the sentiment weak. Whereas, overwhelming response to the Treasury Bill Auction (bids over Rs1.1 trillion), cushioned the dip. Albeit, the market closed at 43,168 points, (down by 0.1 percent / 39 points WoW).

Sector-wise positive contributions came from i) Commercial Banks (109 points), ii) Automobile Parts & Accessories (29 points), iii) Automobile Assembler (20 points), iv) Refinery (20 points), and v) Textile Weaving (12 points). Whereas, negative sector-wise contribution came from Oil & Gas Exploration Companies (96 points) and Power Generation & Distribution (55 points). Scrip-wise positive contributions were led by MEBL (31 points), HBL (28 points), THALL (25 points), BYCO (21 points) and HMB (18 points).

Foreign buying continued this week clocking-in at USD 2.8 million compared to a net buy of USD 7.0 million last week. Buying was witnessed in E&Ps (USD 1.4 million) and Fertilizer (USD 1.3 million).

On the domestic front, major selling was reported by Insurance Companies (USD 2.8 million) and Individuals (USD 2.2 million). Average Volumes settled at 246 million shares (down by 19 percent WoW) while average value traded clocked-in at USD 49 million (down by 38 percent WoW).

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