KARACHI: The lockdown imposed by Sindh government may impact positive sentiments in the stock market. Analysts at Arif Habib Limited said that Karachi is set to observe a more stringent lockdown in place next week to contain the highly contagious delta variant of the novel coronavirus.
It appears the market may remain upwards sticky in the short term.
Albeit, with the result season commencing, and cyclicals expected to post a robust jump in earnings on a YoY basis (given a nation-wise lockdown was enforced in 2Q last year), certain select stocks may come under limelight.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.7x (2021) compared to Asia Pac regional average of 15.8x and offering a DY of 6.7 per cent versus 2.4 per cent offered by the region.
The KSE-100 index remained under pressure for most part of the week, closing in red on 4 out of 5 sessions.
Key sentiment dampener was the sharp incline in domestic COVID ratio with businesses asked to operate at 50 per cent workforce.
Although investors heaved a sigh of relief during mid-week with the Central Bank holding its benchmark policy rate at 7 per cent, which translated to buying in cement and steel scrips.
That said, the market ended at 47,055.29 points (down by 1.54 per cent / -738 points WoW).
Contribution to the downside was led by i) Cements (212 points), ii) Commercial Banks (178 points), iii) Oil and Gas Exploration Companies (58 points), iv) Pharmaceuticals (53 points), and v) Oil and Gas Marketing Companies (51 points). Scrip-wise major losers were LUCK (118 points), TRG (62 points), MCB (60 points), PSO (45 points), and HBL (44 points). Whereas, scrip-wise major gainers were SYS (67 points), FCEPL (43 points), HUBC (38 points), ANL (34 points) and MTL (21 points).
Foreigners offloaded stocks worth of USD 5.4 million compared to a net sell of USD 21.02 million last week. Major selling was witnessed in Commercial Banks (USD 2.94 million) and All other Sectors (USD 2.56 million). On the local front, buying was reported by Banks (USD 6.30 million) followed by Mutual Funds (USD 2.43 million).
That said, average daily volumes and traded value for the outgoing week were up by 28 per cent and 14 per cent to 405 million shares and USD 81 million, respectively.