KARACHI: Investors of Pakistan stocks will eye the monetary policy decision during the next week as most of them anticipating a further hike.
Analysts at Arif Habib Limited said that a key event to look out for next week is the upcoming Monetary Policy Committee (MPC), in which further rate hike is expected.
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An assurance from friendly countries to fund a balance of payments gap is awaited in securing the IMF deal. Therefore, the materialization of said commitment from these countries will help put the IMF program back on track and aid the sentiment at the index.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 3.7x (2023) compared to Asia Pac regional average of 11.5x while offering a dividend yield of 11.4 per cent versus 3.1 per cent offered by the region.
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In market witnessed lackluster activity this week, mainly because of uncertainty over the resumption of the IMF program. In order to unlock the next tranche, IMF has sought confirmation on external financing from bilateral countries, including Saudi Arabia and the UAE.
As a result, PKR depreciated against USD by PKR 0.59 | 0.21 per cent WoW, closing the week at 283.79/USD. Moreover, the SBP reserves showcased a reduction of $ 345 million WoW, to settle at $ 4.2 billion. With that said, the market closed at 40,001 points, up 58 points (up by 0.15 per cent) WoW.
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Sector-wise positive contributions came from i) Automobile Assembler (61 points), ii) Fertilizer (34 points), iii) Cement (10 points), iv) Insurance (4 points), and iv) Glass & Ceramics (3 points).
Whereas, the sectors which contributed negatively were i) Miscellaneous (112 points), ii) Commercial Banks (20 points), Power Generation & Distribution (17 points), Food & Personal Care Products (14 points), and Oil & Gas Exploration Companies (11 points). Scrip-wise positive contributors were MTL (57 points), EFERT (38 points), FFC (29 points), SYS (23 points) and POL (17 points). Meanwhile, scrip-wise negative contribution came from PSEL (118 points), ENGRO (35 points), BAHL (27 points), TRG (22 points), and PPL (20 points).
READ MORE: Weekly Review: PSX investors’ sentiments linked to IMF program
Foreigners selling was witnessed during this week, clocking in at $ 0.3 million compared to a net buy of $ 0.5 million last week. Major selling was witnessed in Fertilizer ($ 0.9 million) and Textile Composite ($ 0.7 million).
On the local front, buying was reported by Banks/DFIs ($ 4.6 million) followed by Companies ($ 4.5 million). Average volumes arrived at 92 million shares (down by 31 per cent WoW) while average value traded settled at $ 12 million (down by 6 per cent WoW).
