Weekly Review: market likely stay in green

Weekly Review: market likely stay in green

KARACHI: The market likely to stay in green during next week owing to stable rupee and improved remittances, analysts said.

Analysts at Arif Habib Limited said that the market to remain green due to slowdown in Covid-19 infection ratio, improvement on the macro-economic front amid higher remittances resulting in current account surplus, stable PKR/USD parity, and rising construction activity which will increase demand of cement and steel.

However, a surprise surge in domestic Covid-19 infection ratio together with rising global coronavirus cases (as daily cases in December averaged more than 600,000, exerting pressure on countries to impose a lockdown) may create pressure.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.4x (2021) compared to Asia Pac regional average of 15.6x while offering a dividend yield of ~6.2 percent versus ~2.4 percent offered by the region.

This week trading commenced on a negative note and the index nosedived by 834 points on first two trading days due to new strain of coronavirus being found in United Kingdom which unsettled global sentiment, international oil prices dropping by 5 percent DoD, and pressure on European equity markets.

However, the negative performance was short lived as the index displayed a rebound on next two trading days (Wednesday and Thursday) and cumulatively increased by 510 points amid current account surplus for fifth straight month, expectation of government extending amnesty period for construction sector, and expected restoration of IMF programme.

The KSE-100 index closed at 43,417 points, down by 324 points or 0.74 percent WoW. 

Contribution to the downside was led by i) Oil and Gas Exploration Companies (229 points), ii) Commercial Banks (155 points), iii) Fertilizers (77 points), iv) Pharmaceuticals (44 points), and v) Food & Personnel Care Products (24 points). Scrip-wise major losers were PPL (76 points), OGDC (68 points), POL (52 points), MEBL (51 points), and ENGRO (56 points). Whereas, scrip-wise major gainers were TRG (46 points), CHCC (40 points) LUCK (34 points), SYS (29 points) and GHGL (29 points). 

Foreigners offloaded stocks worth of USD 20.44 million compared to a net sell of USD 9.36 million last week. Major selling was witnessed in Fertilizer (USD 8.23 million) and Power (USD 5.46 million). On the local front, buying was reported by Companies (USD 25.61 million) followed by Broker Proprietary Trading (USD 1.17 million). That said, average daily volumes and traded value for the outgoing week were down by 8 percent and 11 percent to 507 million shares and USD 138 million, respectively.

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