KARACHI: The stock market likely to stay positive during next week owing to improved economic indicators, analysts said.
The analysts at Arif Habib Limited said that the market to remain green especially cyclical sectors including Cement, Steel, Textile and Automobile amid notable improvement in macros including quick recovery in exports, reduction in trade deficit, stable Pak Rupee, drastic increase in industrial outputs (majority companies operating at maximum capacity) and lower inflation expectation.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.3x (2021) compared to Asia Pac regional average of 13.7x while offering a dividend yield of ~6.2 percent versus ~2.6 percent offered by the region.
This week trading commenced on a negative note due to profit taking which resulted in selling pressure in Cement, Steel, Automobile, and E&P sector.
On Tuesday however, a rebound was witnessed at the index attributable to increase in international oil prices and prospects of consensus between Independent Power Producers and the Government of Pakistan.
On the other hand, increase in fertilizer prices also increased activity in the fertilizer sector. However, honorable Supreme Court of Pakistan announced its reserved verdict on GIDC today whereby industries are required to pay Rs457 billion which once again brought pressure on industries (Fertilizer, Cement, Steel, Chemicals and Textiles).
With that said, the KSE-100 index closed at 40,291 points, up by 261 points or 0.65 percent WoW (eighth consecutive positive week after January 2017).
Contribution to the upside was led by i) Power Generation and Distribution (261 points), ii) Oil and Gas Exploration Companies (97 points), iii) Oil and Gas Marketing Companies (92 points), iv) Commercial Banks (86 points), and v) Textile Composite (29 points).
Scrip wise major gainers were HUBC (213 points), PPL (56 points), UBL (56 points), KAPCO (39 points), and SNGP (36 points). Whereas, scrip wise major losers were DAWH (55 points), ENGRO (49 points) MCB (31 points), EFERT (25 points) and FFC (23 points).
Foreign buying continued this week clocking-in at USD 8.7 million compared to a net buy of USD 3.7 million last week. Buying was witnessed in Cement (USD 4.3 million) and Fertilizer (USD 2.7 million). On the domestic front, major selling was reported by Banks/DFI (USD 10.7 million) and Insurance Companies (USD 5.4 million). That said, average daily volumes and traded value for the outgoing week were down by 9 percent and 14 percent to 581 million shares and USD 125 million, respectively.