KARACHI: Pakistan stocks likely to move during next week on foreign inflows from International Monetary Fund (IMF) and friendly countries.
Analysts at Arif Habib Limited said that any further development on the Staff Level Agreement (SLA) front would decide the direction of the market in the coming weeks.
In case of successful completion and signing of staff-level agreement with IMF, the market will observe a positive momentum.
READ MORE: KSE-100 Index ends up 208 points in bullish trading
Furthermore, any commitment of funds from friendly countries will further elevate the sentiment.
The benchmark KSE-100 Index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.0x (2023) compared to Asia Pac regional average of 11.6x while offering a dividend yield of 10.8 per cent versus 2.9 per cent offered by the region.
The market commenced on a positive note this week, with investors anticipating positive news on signing of SLA with the IMF.
READ MORE: Pakistan equities end up 227 points as investors hopeful of IMF program
In addition to this, the loan from ICBC (Chinese Bank) further fueled the positive momentum. Furthermore, the Finance Minister informed that government will reach staff level agreement with the IMF for the 9th tranche of the Extended Fund Facility in the coming few days, which kept the investor sentiment bullish.
Furthermore, the SBP reserves climbed up by $487 million to $4.3 billion, due to the disbursement of a commercial loan from China.
Whereas, the gross inflows in RDA witnessed a growth of 14 per cent MoM (climbing up by $125 million) during Feb’23. With this the overall cumulative gross flows in RDA reached to $5.8 billion.
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However, PKR depreciated against the dollar by PKR 2.85 | 1 per cent WoW against USD, closing the week at 280.77/USD. Meanwhile, the remittances witnessed a decline of 9 per cent YoY to $2 billion in February 2023.
In addition to this, the textile exports in February 2023 plummeted by 28 per cent YoY | 9 per cent MoM. Albeit, the market closed at 41,794 points, gaining 457 points (up by 1.1 per cent) WoW.
Sector-wise positive contributions came from i) Cement (200 points), ii) Technology (93 points), iii) Power (92 points), iv) Banks (89 points), and iv) Engineering (37 points). Whereas, the sectors which contributed negatively were i) Miscellaneous (161 points), ii) Insurance (14 points), and iii) Chemical (11 points).
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Scrip-wise positive contributors were HUBC (89 points), HBL (72 points), LUCK (50 points), SYS (48 points) and PPL (36 points). Meanwhile, scrip-wise negative contribution came from PSEL (164 points), POL (29 points), ENGRO (25 points), UBL (14 points), and NBP (14 points).
Foreigners selling was observed during this week, clocking in at $2.9 million versus a net buy of $0.3 million last week.
Major selling was witnessed in Commercial Bank ($2.6 million) and all other sectors ($1.2 million). On the local front, buying was reported by Companies ($10.5 million) followed by Banks/DFIs ($1.3 million).
Average volumes arrived at 209 million shares (up 31 per cent WoW) while average value traded settled at $23.7 million (down 12 per cent WoW).
