Weekly Review: investors to keep eye on IMF loan program

Weekly Review: investors to keep eye on IMF loan program

KARACHI: Investors of Pakistan stocks will keep eye on IMF loan program during next week, which will set the market direction.

Analysts at Arif Habib Limited said that market participants will be keeping a close watch on the developments regarding the IMF program.

READ MORE: Pakistan stocks end down by 131 points in choppy trade

In the event of a staff-level agreement (SLA) being reached with the IMF, the equity market is likely to experience positive momentum.

The benchmark KSE-100 is currently trading at a PER of 3.9x (2023) compared to Asia Pac regional average of 11.8x while offering a dividend yield of 10.5 per cent versus 2.9 per cent offered by the region.

The market started on a positive note this week as parliament passed the Finance Bill, aimed to change certain laws relating to taxes and duties in order to generate an additional Rs 170 billion.

READ MORE: Pakistan stocks remain depressed on rate hike fears

Additionally, the current account posted a $3.8 billion deficit in July-Jan of FY23 compared to $11.56 billion in the same period of last fiscal year, depicting a decline of $7.76 billion, the main reason in the decline was a reduction in imports.

However the market started to deteriorate towards the end of the week as money market yields rose significantly indicating an imminent rate hike. Furthermore, the SBP reserves showcased an increase of $66 million to $3.25 billion, and the Pak Rupee appreciated by Rs2.81 | 1.07 per cent WoW against the dollar, closing the week at 259.99 to the dollar. That said, the market closed at 40,708points, down by 411 points | -1.00 per cent WoW.

READ MORE: KSE-100 index gains 218 points on investors’ optimism

Sector-wise negative contributions came from i) Oil & Gas Exploration Companies (269 points), ii) Commercial Banks (171 points), iii) Oil & Gas Marketing Companies (71 points), iv) Fertilizer (60 points), and iv) Chemical (35 points).

Whereas, the sectors which contributed positively were i) Miscellaneous (100 points), ii) Power Generation & Distribution (89 points), and iii) Cement (71 points). Scrip-wise negative contributors were PPL (151 points), HBL (143 points), OGDC (118 points), TRG (40 points), and PSO (38 points).

Meanwhile, scrip-wise positive contribution came from PSEL (109 points), HUBC (90 points), SYS (71 points), UBL (61 points) and MLCF (34).

READ MORE: Pakistan stocks move up 276 points hoping early IMF deal

Foreigners buying continued during this week, clocking in at $0.75 million compared to a net buy of $1.6 million last week. Major buying was witnessed in Technology & Communication ($1.1 million) and Other Sectors ($0.4 million).

On the local front, selling was reported by Individuals ($4.6 million) followed by Insurance ($1.9 million). Average volumes arrived at 138 million shares (down by 10 per cent WoW) while average value traded settled at $20.1 million (down by 21 per cent WoW).