Weekly Review: Market likely to continue gaining momentum

Weekly Review: Market likely to continue gaining momentum

KARACHI: The share market is likely to continue gaining momentum during the next week owing to positive reports on economic front.

Analysts at Arif Habib Limited said that the market should sustain its momentum next week.

Expectations are ripe of a significant easing in the lockdown to help restart business activity in the country which is another positive for the market.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.2x (2020) compared to Asia Pac regional average of 10.2x and while offering DY of around 8.1 percent versus around 3.1 percent offered by the region.

Sentiment in the local equity bourse showed signs of inflection this week. Investors remained undeterred by initial signs of economic gloom from the pandemic which were reflected in broadly weak corporate earnings.

Progress on a vaccine against the Coronavirus reported by Gilead and Oxford University has uplifted investment climate in global markets which has spilled over on to the PSX as well. In addition to the IMF’s RFI (Rapid Financing Instrument) worth USD 1.4 billion, the ADB also announced USD 1.7 billion to help Pakistan deal with the pandemic, which helped to jack up confidence in the markets.

The rupee has also appreciated around 4 percent which has also contributed to the turnaround in investors’ confidence.

The KSE-100 Index closed at 34,112 points in the 4-day trading week, up by 1,305 points WoW (3.98 percent).

Sector-wise positive contributions came from i) Oil & gas exploration companies (396 points), ii) Power generation and distribution (201 points), iii) Fertilizers (158 points), iv) Cement (126 points) and v) Oil & gas marketing companies (78 points). While scrip-wise positive contributions were led by i) HUBC (197 points), ii) OGDC (144 points), PPL (119 points), POL (92 points) and FFC (79 points).

Foreign offloading during the week arrived at USD 11.6 million compared to a net sell of USD 2.5 million last week. Selling was witnessed in Oil & Gas Exploration and Production (USD 7.7 million), Fertilizers and Banks (USD 1.5 million each).

On the domestic front, Mutual Funds accumulated stocks worth USD 4.2 million, while Companies bought USD 3.6 million. Average Volumes settled at 179 million shares (down by 32 percent WoW) while average value traded clocked-in at USD 49 million (down by 32 percent WoW).