KARACHI: The stock market likely to stay range bound during the next week owing to concerns including high imports and inflation.
Analysts at Arif Habib Limited said that the market to show positivity in the upcoming week attributable to conclusion of talks with the IMF for the sixth tranche.
Moreover, decline in infection ratio of the novel coronavirus in Pakistan and slowdown in global oil prices would release pressure from external account.
“However, current macro-economic concerns like rising imports, higher inflationary reading due to increasing petroleum prices and pressure on currency could keep the market range-bound.”
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.2x (2021) compared to Asia Pac regional average of 14.4x while offering a dividend yield of 8.2 per cent versus 2.3 per cent offered by the region.
This week trading activity remained jittery amid macro-economic concerns which includes i) downslide in Rupee to an all-time low, ii) weak trade performance as imports continued to surge which widened the trade deficit over 70 per cent YoY in September 2021 and 100 per cent in 1QFY22, iii) continuous increase in international coal prices putting pressure on cement scrips, and iv) all-time high international commodity index causing panic amongst investors.
However, trading activity picked pace on the back of i) slight improvement in the PKR-USD parity given curbs on dollar outflows, and ii) dip in international coal prices which rejuvenated investors interest in cement sector.
As a result, the KSE-100 index closed at 44,477 points, down by 394 points or 0.88 per cent WoW.
Contribution to the downside was led by i) Cements (268 points), ii) Fertilizer (110 points), iii) Oil & Gas Marketing Companies (47 points), iv) Power Generation and Distribution (30 points), and v) Engineering (25 points). Scrip-wise major losers were LUCK (139 points), FFC (45 points), PPL (39 points), CHCC (38 points), and SNGP (34 points). Whereas, scrip-wise major gainers were MARI (144 points), UBL (69 points), SEARL (41 points), MTL (27 points) and COLG (26 points).
Foreigners offloaded stocks worth of USD 3.70 million compared to a net sell of USD 21.85 million last week. Major selling was witnessed in Commercial Banks (USD 9.85 million) and Fertilizer (USD 4.33 million). On the local front, buying was reported by Individuals (USD 7.13 million) followed by Mutual Funds (USD 3.61 million).
The average daily volumes and traded value for the outgoing week were down by 25 per cent and 21 per cent to 265 million shares and USD 60 million, respectively.