Weekly Review: Investors to remain cautious after Sukuk repayment

Weekly Review: Investors to remain cautious after Sukuk repayment

KARACHI: Investors of Pakistan Stock Exchange (PSX) may cautious during next week after repayment of Sukuk made by the country.

The repayment has been made under a scenario when foreign exchange reserves are alarmingly low.

Analysts at Arif Habib Limited expect the market to remain range bound during next week.

READ MORE: Pakistan stocks lose 243 points on political unrest

“The extension in the term of Saudi Fund worth $3 billion will provide breather to the concerns regarding external repayments. We do highlight that Pakistan International Sukuk is maturing on December 05, 2022, however, as per SBP, funding against this has already been arranged,” they added.

The benchmark KSE-100 index of PSX was trading at a PER of 4.1x (2023) compared to Asia Pac regional average of 12.9x while offering a dividend yield of 10.2 per cent versus 2.8 per cent offered by the region.

READ MORE: Stocks end positive 45 points despite profit taking

The market commenced on a negative note amid surprising policy rate hike by the SBP (+100 basis points to 16 per cent) on last Friday coupled with political noise, with the index losing 973 points during the intraday.

The momentum briefly turned green after the SBP received $500 million from Asian Infrastructure Investment Bank. With this, Pak Rupee appreciated during the week against the greenback, gaining by PKR 0.25 | 0.11 per cent WoW to settle at PKR 223.69.

READ MORE: Pakistan stocks end flat in low volumes

However, momentum shifted back to the negative zone, after PBS data depicted an increase in trade deficit by 24 per cent MoM in November 2022. In addition to this, the Consumer Price Index (CPI) in November 2022 arrived at 23.84 per cent (up by 0.76 per cent MoM).

Furthermore, SBP’s foreign exchange reserves data showcased a decline of $327 million. The market closed at 42,150points, shedding 787 points (down by 1.8 per cent WoW).

Sector-wise negative contributions came from i) Cement (243 points), ii) Technology (101 points), iii) Fertilizer (83 points), iv) E&Ps (70 points) and v) Banks (62 points).

Whereas, sectors which contributed positively were i) Miscellaneous (82 points), and ii) Power (48 points). Scrip-wise negative contributors were TRG (102 points), LUCK (79 points), CHCC (43 points), MTL (39 points) and MLCF (38 points).

READ MORE: Stocks gain 302 points on AIIB inflows

Meanwhile, scrip-wise positive contribution came from PSEL (87 points), HUBC (59 points), SYS (24 points), HBL (12 points) and IBFL (4 points).

Foreigners buying continued during this week, settling at $6.6 million compared to a net buy of $1.1 million last week. Major buying was witnessed in E&P ($2.0 million), Cement ($1.8 million), and Technology ($1.6 million).

On the local front, selling was reported by Mutual Funds ($6.3 million) followed by Broker Proprietary Trading ($2.1 million). Average volumes clocked in at 162 million shares (up by 1 per cent WoW) while average value traded settled at $24 million (down by 7 per cent WoW).

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