Weekly Review: investors may stay cautious on political uncertainty

Weekly Review: investors may stay cautious on political uncertainty

KARACHI: Investors of Pakistan stocks may stay cautious during next week due to political uncertainty, analysts said. The analysts at the Arif Habib Limited said that the market is expected to remain range bound in the upcoming week as the participants will remain cautious due to the political noise in the country.

Furthermore, any positive news coming from the FM’s visit to UAE and IMF 9th review will benefit the market.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.1x (2023) compared to Asia Pac regional average of 12.6x while offering a dividend yield of 10.2 per cent versus 2.8 per cent offered by the region.

The market commenced on a positive note this week as the country is expected to get $13 billion financing from China ($9 billion) and Saudi Arabia ($4 billion). The momentum carried on during the week as Saudi Crown Prince Mohammad bin Salman is expected to visit Pakistan on November 21 and may announce various investment projects.

The Pak Rupee was slightly down against the greenback, closing at PKR 221.95 (down by 0.1 per cent WoW). In addition to this, SBP reserves went down to $7.95 billion this week, down by $956 billion compared to $8.91 billion on October 28, 2022. The market closed at 43,093 points, gaining 1,237 points (up by 2.95 per cent WoW).

Sector-wise positive contributions came from i) Commercial Banks (368 points), ii) Oil & Gas Exploration Companies (285 points), iii) Technology & Communication (205 points), iv) Cement (80 points) and v) Power Generation & Distribution (76 points).

Whereas, sectors which contributed negatively were i) Miscellaneous (87 points), ii) Automobile Parts & Accessories (3 points), and iii) Food & Personal Care Products (2 points). Scrip-wise positive contributors were TRG (176 points), OGDC (130 points), PPL (119 points), MEBL (106 points) and BAFL (56 points). Meanwhile, scrip-wise negative contribution came from PSEL (81 points), RMPL (29 points), SHFA (6 points), SCBPL (3 points) and ILP (3 points).

Foreigners selling continued during this week, clocking in at $4.7 million compared to a net sell of $1.6 million last week. Major selling was witnessed in Banks ($5.3 million), Technology and Communication ($1.1 million) and other sectors ($0.4 million).

On the local front, buying was reported by Mutual Funds ($3.6 million) followed by Banks/DFIs ($3.0 million). Average volumes clocked in at 251 million shares (up by 10 per cent WoW) while the average value traded settled at $33 million (up by 31 per cent WoW).