Weekly Review: positive sentiments to prevail in stock market

KARACHI: Positive sentiments likely prevail in the stock market during next week owing to visit of Prime Minister Imran Khan to China and arrival of IMF team to Pakistan.

Analysts at Arif Habib Limited said that with Prime Minister Imran Khan currently on a four day visit to China, several agreements are expected to be signed between both the countries.

He met the World Bank CEO and IMF MD on the sidelines to discuss a potential financial assistance package. The analysts expected other positive announcements upon his arrival as well.

The local bourse witnessed a mixed trend during the week. The sentiment amongst investors remained suppressed amid concerns over the IMF Program, Budget 2019-2020 and macro-economic challenges since Dr. Hafeez Shaikh took over as Finance Advisor to PM.

Moreover, reserves declined by 1.2 percent WoW. Albeit, the market was able to hold its ground amidst the ongoing result season which yielded several healthy results.

The benchmark KSE-100 of Pakistan Stock Exchange (PSX) closed at 37,130 points, shedding 162 points (down by 0.43 percent) WoW.

Sector-wise negative contributions came from i) Pharmaceuticals (94 points) as price hike by domestic manufacturers came under fire by the government, ii) Oil & Gas Exploration Companies (64 points), and iii) Oil & Gas Marketing Companies (46 points).

On the other hand, sectors that contributed positively include i) Commercial Banks (116 points) given robust results in 1QCY19 despite imposition of higher taxes, ii) Cement (44 points) over expectation of recovery in cement prices, and iii) Tobacco (8 points).

The scrips that remained under pressure include PPL (51 points), FFC (30 points), SEARL (29 points), and PSO (27 points). On the flip-side, scrip-wise positive contributions came from UBL (75 points), ENGRO (28 points), DAWH (22 points), and LUCK (21 points).

Foreign buying was witnessed this week, clocking-in at USD 9.3 million compared to a net sell of USD 1.9 million last week.

Buying was witnessed in Commercial Banks (USD 5.3 million) and all other sectors (USD 1.3 million).

On the domestic front, major selling was reported by Mutual Funds (USD 8.2 million) and Individuals (USD 3.7 million).

Volumes settled at 122 million shares (down by 30 percent WoW) while value traded clocked in at USD 33 million (down by 15 percent WoW).

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