KARACHI: Investors of Pakistan stocks likely to remain cautious during next week due to rising political noise.
Analysts at Arif Habib Limited said that the equity bourse is expected to remain range bound in the upcoming week as market participants will remain cautious due to the political noise in the country.
Furthermore, any positive news coming from friendly countries or IMF 9th review will benefit the market.
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The benchmark KSE-100 index of Pakistan Stock Exchange is currently trading at a PER of 3.9x (2023) compared to Asia Pac regional average of 11.7x while offering a dividend yield of ~10.5 per cent versus ~3.0 per cent offered by the region.
The market commenced on a positive note this week with news of progress on circular debt. Additionally, the market remained in green zone since Pakistan secured over $ 10 billion in pledges from international financial institutions and the UAE agreed to lend $ 1 billion to Pakistan and roll over an existing $ 2 billion loan.
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However, uncertainty prevailed towards the week due to political concerns.
Moreover, foreign exchange fell another $ 1.2 billion to $4.3 billion, lowest level of SBP-held reserves since February 2014. The large drop in Forex reserves was due to external debt repayment.
In addition, PKR depreciated by PKR 1.01 | 0.4 per cent WoW against $, closing the week at 228.14. The index closed at 40,323 points, shedding 684points (down by 1.7 per cent) WoW.
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Sector-wise negative contributions came from i) Commercial Banks (222 points), ii) Fertilizer (132 points), iii) Technology & Communication (132 points), iv) Pharmaceuticals (59 points) and v) Oil & Gas Exploration Companies (35 points).
Whereas, the sectors which contributed positively were i) Miscellaneous (68 points), ii) Automobile Assembler (39 points), iii) Insurance (6 points), iv) Automobile Parts & Accessories (3 points) and v) Paper & Board (3 points).
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Scrip-wise negative contributors were TRG (107 points), ENGRO (55 points), BAHL (54 points), MEBL (37 points) and MCB (33 points). Meanwhile, scrip-wise positive contribution came from PSEL (73 points), MTL (54 points), LOTCHEM (15 points), NESTLE (15 points) and JVDC (7 points).
Foreigners buying continued during this week, arriving at $ 1.2 million compared to a net buy of $ 0.3 million last week. Major buying was witnessed in Exploration and Production ($ 0.7 million) and All other sectors ($ 0.6 million).
On the local front, selling was reported by Mutual Funds ($ 4.7 million) followed by Banks/DFIs ($ 4.5 million). Average volumes clocked in at 183 million shares (up by 4 per cent WoW) while average value traded settled at $ 27 million (up by 16 per cent WoW).
