KARACHI: Investors to keep eye on inflationary pressure and subsequent monetary policy announcement during next week.
Analysts at Arif Habib Limited said that investors should remain cautious in the upcoming week as the monetary policy committee (MPC) is meeting whereas inflationary pressure is set to rise in the backdrop of augmenting commodity prices.
Moreover, talks with the IMF are expected to resume on January 28, 2022 which could have a positive impact on the market.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.1x (2022) compared to Asia Pac regional average of 13.9x while offering a dividend yield of 8.7 per cent versus 2.3 per cent offered by the region.
The market commenced on a negative note this week. This trend continued throughout the week due to higher COVID-19 cases and an increase in global commodity prices.
However, the sentiment once again turned positive on Friday as the government revised GDP numbers upwards from 3.94 per cent to 5.4 per cent. Furthermore, FDI increased 20 per cent during the first half of the fiscal year to USD 1,050 million against USD 880 million USD SPLY.
The Pak Rupee closed below 176 for the first time in over 45 days on Monday but crept up during the week, closing at 176.24.
Overall the market closed at 45,018 points down 745 points from last week, marking a 1.63 per cent decrease WoW.
Sector-wise negative contributions came from i) Technology & Communication (241 points), ii) Commercial Banks (96 points), iii) Cement (69 points), iv) Refinery (65 points), and v) Fertilizer (63 points). Whereas, sectors which contributed positively were i) Oil & Gas Exploration Companies (36 points), ii) Power Generation & Distribution (7 points) and iii) Real Estate Investment Trust (6 points). Scrip-wise negative contributors were TRG (239 points), CNERGY (31 points), MCB (23 points), DAWH (22 points) and PSO (21 points). Meanwhile, scrip-wise positive contribution came from KAPCO (30 points), MARI (24 points) and BAHL (23 points).
Foreigners remained net sellers this week, clocking-in at USD 2.09 million compared to a net buy of USD 0.53 million last week. Major selling was witnessed in OMC’s (USD 1.4 million) and Technology & Communication (USD -1.0 million). On the local front, buying was reported by Individuals (USD 12.4 million) followed by Banks (USD 5.9 million). Average volumes clocked-in at 201 million shares (down by 43 per cent WoW) while average value traded settled at USD 42 million (down by 17 per cent WoW).