KARACHI: Investors of Pakistan stocks will remain eye on loan program under International Monetary Fund (IMF) during next week.
Analysts at Arif Habib Limited said that market participants will be keeping a close watch on the developments regarding the IMF program.
In the event of a staff-level agreement (SLA) being reached with the IMF, the equity market is likely to experience positive momentum.
READ MORE: Pakistan stocks end up 666 points on IMF tranche hopes
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.0x (2023) compared to Asia Pac regional average of 11.8x while offering a dividend yield of 10.7 per cent versus 2.9 per cent offered by the region.
The week kicked-off on a negative note due to uncertainty over the resumption of the IMF program. This uncertainty persisted throughout the week as the market was waiting for the MPC to meet.
On Thursday, the State Bank (SBP) decided to increase the policy rate by 300 basis points to 20 per cent. This was dictated by the Consumer Price Index (CPI), which rose to 31.55 per cent YoY in February 2023, as food, beverages, and transportation charges substantially increased.
READ MORE: Pakistan equities gain 258 points owing to discounted stock prices
The hike in policy rate signaled to investors that Pakistan has met all the prerequisites for the SLA to be signed and propelled the market to gain positive momentum towards the end of the week.
Furthermore, the SBP reserves showcased an increase of USD 556 million to USD 3.81 billion, mainly due to the inflow of USD 700 million from China.
The Rupee depreciated by PKR 18.47 | 7.1 per cent WoW against USD, closing the week at 278.46/USD. That said, the market closed at 41,337points, up by 629 points | +1.55 per cent WoW.
Sector-wise positive contributions came from i) Banks (328 points), ii) Miscellaneous (169 points), iii) E&Ps (103 points), iv) Power (68 points), and iv) Fertilizer (61 points).
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Whereas, the sectors which contributed negatively were i) Technology & Communication (71 points), ii) Cement (46 points), and iii) Tobacco (27 points). Scrip-wise positive contributors were PSEL (167 points), UBL (116 points), HUBC (68 points), MEBL (66 points) and MCB (55). Meanwhile, scrip-wise negative contribution came from SYS (55 points), LUCK (33 points), PAKT (27 points), JVDC (13 points), and GHGL (12 points).
Foreigners buy continued during this week, clocking in at USD 0.3 million compared to a net buy of USD 0.8 million last week.
READ MORE: Stocks shed 274 points on rate hike expectations
Major buying was witnessed in Textile Composite (USD 1.5 million) and OMCs (USD 0.2 million). On the local front, selling was reported by Individuals (USD 9.5 million) followed by Mutual Funds (USD 5.8 million). Average volumes arrived at 138 million shares (down 10 per cent WoW) while average value traded settled at USD 20.1 million (down 21 per cent WoW).
