KARACHI: The Pakistan stocks likely to stay positive owing to more flows of foreign funds after an agreement signed by the country and the International Monetary Fund (IMF).
Analysts at Arif Habib Limited said that with Pakistan and IMF reaching staff-level agreement, the government plans to raise funds worth $9 billion-$ 10 billion from international financial institutions such as World Bank, Asian Development Bank and Islamic Development Bank which will help build-up reserves.
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The analysts expect the market to be positive in next week. The benchmark KSE-100 of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.3x (2022) compared to Asia Pacific regional average of 10.2x while offering a dividend yield of 9.1 per cent versus 3.0 per cent offered by the region.
The three-day week commenced on a positive note given Government reached a staff-level agreement with the IMF, which would enable the disbursement of the $1.2 billion under the Extended Fund Facility subject to approval of Executive Board (IMF).
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Alongside this, approval by Prime Minister Shehbaz Sharif for the reduction in petroleum prices (reducing MS and HSD by PKR 18.50/litre and PKR 40.54/litre) was also welcomed by the market.
On the other hand, the Pak Rupee further depreciated after staging a briefing recovery post announcement of IMF deal (closing the week at PKR 210.95), leading to bearish momentum on the last trading day of the week. The index closed at 42,075points, gaining 731 points (up by 1.8 per cent) WoW.
Sector-wise positive contributions came from i) Commercial Banks (194 points), ii) Cement (99 points), iii) Technology & Communication (93 points), iv) Fertilizer (85 points) and v) Oil & Gas Exploration Companies (82 points).
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Whereas, sectors which contributed negatively were i) Automobile Assembler (22 points) and ii) Pharmaceuticals (9 points). Scrip-wise positive contributors were MEBL (84 points), SYS (70 points), PSO (53 points), LUCK (45 points) and PPL (39 points). Meanwhile, scrip-wise negative contribution came from COLG (17 points), ABOT (15 points), MTL (10 points), POL (10 points) and EFUG (9 points).
Foreign buying was witnessed this week, clocking in at USD 1.40 million compared to a net buy of USD 1.63 million last week. Major buying was witnessed in all other sectors (USD 0.43 million) and banks (USD 0.36 million).
On the local front, selling was reported by Banks/DFIs (USD 1.43 million) followed by Insurance Companies (USD 1.13 million). Average volumes clocked in at 178 million shares (up by 97 per cent WoW) while average value traded settled at USD 31 million (up by 108 per cent WoW).
