Weekly Review: stock market to maintain upward trajectory

KARACHI: The stock market may maintain upward trajectory during next week, analysts said.

Fundamentals appear intact with stable PKR, compressing current account deficit, and inflows in T-bills, PIBs and the local bourse, should all bode well for the index.

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 ~6.3 percent versus ~2.7 percent offered by the region.

The market depicted a mixed trend during the outgoing week with the benchmark KSE-100 index witnessing some weakness at the beginning of the week amid rising conflict between Iran and the US.

Sentiments further worsened mid-week given Iranian strike on US Military base in Iraq. Albeit, the Pakistani bourse echoed global stock markets, depicting a swift rally post speech of the POTUS Donald Trump, which helped de-escalate tensions. With that, the market breached a 17 month high level of 13k to close at 43,207points (up by 2.1 percent WoW, +884 points WoW).

Sector-wise positive contributions came from i) Commercial Banks (403 points), ii) Oil & Gas Exploration Companies (178 points), iii) Fertilizer (111 points), iv) Power Generation (86 points), and v) Cement (77 points). Whereas, negative sector-wise contribution came from Automobile Assemblers (44). Scrip-wise positive contributions were led by HUBC (105 points), HBL (95 points), PPL (88 points), LUCK (87 points) and UBL (73 points).

Foreign buying witnessed this week clocking-in at USD 7.0 million compared to a net sell of USD 7.3 million last week. Buying was witnessed in Fertilizer (USD 5.9 million) and E&Ps (USD 1.8 million).

On the domestic front, major selling was reported by Mutual Funds (USD 5.9 million) and Individuals (USD 4.0 million). Average Volumes settled at 303 million shares (up by 8 percent WoW) while average value traded clocked-in at USD 78 million (up by 13 percent WoW).

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