Weekly Review: Bull Run likely to continue

KARACHI: The bull-run in the market to continue during the next week especially developments on the vaccine front and its gradual roll-out across the world likely to keep interest in equities afloat.

Analysts at Arif Habib Limited said that expectations of healthy corporate profitability during the outgoing quarter particularly across cyclical sectors should keep sentiment positive.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.7x (2021) compared to Asia Pac regional average of 18.0x and while offering DY of around 6.0 percent versus around 2.5 percent offered by the region.

The KSE-100 Index started the New Year with renewed optimism, led by a bullish spree in IPP scrips, following the announcement of the plan for circular debt resolution.

Moreover, oil prices saw a jump of 7.8 percent WoW, as reports came in of Russia abstaining from pushing for an output hike in February.

Expectations of a textile policy announcement plus circular debt resolution plan (benefit for holding companies) created optimism in textile scrips as well.

Banking scrips (large banks in particular) attracted interest as well given economic recovery in the country appears to be on track and loan growth outlook has improved considerably.

The domestic equity bourse closed at 45,654 points (+1,220 points WoW).

Sector-wise positive contributions came from i) Banks (561 points), ii) Fertilizers (224 points), iii) Oil & Gas Exploration (153 points), iv) Power Generation & Distribution declined (66 points), and v) Chemicals (47 points). Scrip-wise positive contributions were led by i) UBL (154 points), ii) HBL (117 points), iii) MEBL (90 points), iv) DAWH (88 points), and v) MCB (80 points).

Foreign buying this week clocking-in at USD 3.4 million compared to a net sell of USD 46.22 million last week. Buying was witnessed in Commercial Banks (USD 3.64 million) and Technology (USD 2.0 million). On the domestic front, major selling was reported by Insurance Companies (USD 8.1 million and Banks / DFIs (USD 8.1 million). Average volumes arrived at 625 million shares (up by 18 percent WoW) while average value traded settled at USD 153 million (up by 8 percent WoW). 

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