Weekly Review: investors remain optimistic

Weekly Review: investors remain optimistic

KARACHI: Investors are remain optimistic about trading in stock market during next week owing to improved economic indicators.

Analysts at Arif Habib Limited said that recovery in international commodities (such as oil) and enticing valuations is expected to keep Banking and E&P scrips under limelight.

Whereas revival in economic growth, healthy offtake, stable pricing power, and low borrowing rates should translate into robust earnings jump in cyclicals (cement, steel and automobile).

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.3x (2021) compared to Asia Pac regional average of 15.7x and while offering DY of ~6.3 percent versus ~2.4 percent offered by the region.

The KSE-100 index managed to post an uptick this week to close at 42,470 points with the coronavirus infection depicting a slight improvement (from a high of 9.7 percent last week compared to 7.9 percent in the current week), Remittances of over USD 2 billion for a sixth consecutive month (+28 percent YoY at USD 2.34 billion), highest ever daily inflows in the Roshan Digital account (USD 7.7 million), and jump in reserves to USD 13.3 billion.

Investors also disregarded political noise (with opposition parties contemplating resigning from National and Provincial assemblies).

Sector-wise positive contributions came from i) Cement (51 points), ii) Oil & Gas Exploration Companies (50 points), and iii) Commercial Banks (50 points). Scrip-wise positive contributions were led by HBL (49 points), UBL (38 points), and OGDC (31 points). On the flipside, major sectoral loss were observed in Tobacco (13 points) while scrip wise negative contributions were led by MCB (45 points) and SYS (22 points).

Foreign selling continued this week clocking-in at USD 9.6 million compared to a net sell of USD 30.0 million last week. Selling was witnessed in Commercial Banks (USD 9.9 million) and OMC’s (USD 1.0 million).

On the domestic front, major buying was reported by Insurance Companies (USD 10.6 million and Individuals (USD 2.9 million). Average volumes arrived at 452 million shares (up by 3 percent WoW) while average value traded settled at USD 123 million (up by by 9 percent WoW).