KARACHI: Investors of Pakistan stocks may react to the surprise hike in policy rate during next week as the central bank made announcement of sharp increase after the closing of last trading day of the outgoing week.
The State Bank of Pakistan (SBP) in its policy announcement on November 25, 2022 shocked all the stakeholders while raising a massive increase in benchmark policy rate by 100 basis points to 16 per cent.
READ MORE: Stocks trade in narrow range on last day of week
Analysts at Arif Habib Limited said market is expected to remain range bound in the upcoming week on the back of surprise hike in the policy rate to 16 per cent (+100bps) by the SBP.
Moreover, dollar inflow from AIIB and the repayment of the SUKUK (fully funded as per SBP) next week are expected to support market momentum and increase investor confidence.
In addition, the PM’s visit to Turkey to enhance bilateral cooperation might bring some positive momentum in the market.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.2x (2023) compared to Asia Pac regional average of 12.9x while offering a dividend yield of ~10.2 per cent versus 2.8 per cent offered by the region.
READ MORE: Pakistan stocks end flat amid political uncertainty
The market commenced on a positive note this week, However, uncertainty prevailed throughout the week due to political concerns. In addition, during the week Pak Rupee depreciated against the greenback, dropping by PKR 0.28 | 0.13 per cent WoW settling at PKR 223.94.
In addition, the current Account Deficit declined by 68 per cent YoY, primarily due to a decline in imports which went down by 23 per cent YoY. The market closed at 42,937, gaining 206 points (up by 0.48 per cent) WoW.
READ MORE: Political uncertainty keeps Pakistan stocks range-bound
Sector-wise positive contributions came from i) Technology & Communications (202 points), ii) Fertilizer (114 points), iii) E&P (26 points), iv) Banks (26 points) and v) Miscellaneous (17 points). Whereas sectors that contributed negatively were i) Power (31 points), ii) Cement (20 points), and iii) Glass (14 points).
Scrip-wise positive contributors were SYS (147 points), ENGRO (92 points), TRG (53 points), DAWH (36 points), and INDU (27 points). Meanwhile, scrip-wise the negative contribution came from HUBC (120 points), MTL (28 points), FATIMA (14 points), LUCK (11 points), and GHGL (11 points).
READ MORE: Stocks end up on addition of Pakistani companies in global indices
Foreigners buying was witnessed during this week, clocking in at $1.11 million compared to a net buying of $2.06 million last week. Major buying was witnessed in Technology & Communications ($0.78 million), All other sectors ($0.74 million), and E&P ($0.24 million).
On the local front, selling was reported by Mutual Funds ($2.82 million) followed by Insurance ($1.42 million). Average volumes clocked in at 160 million shares (down by 14 per cent WoW) while the average value traded settled at $25 million (down by 10 per cent WoW).
