Weekly Review: market likely to continue positive momentum

Weekly Review: market likely to continue positive momentum

KARACHI: The stock market likely to continue its positive momentum next week on the back of continuous improvement in the macroeconomic situation of the country.

Analysts at Arif Habib Limited said that foreign interest in the equity as well as debt markets posits healthy signs for overall investment climate going forward.

The KSE-100 index is currently trading at a PER of 7.1x (2020) compared to Asia Pac regional average of 13.4x and while offering DY of around 7.9 percent versus around 2.6 percent offered by the region.

Trading in the green continued this week as the index continued its bullish momentum as the banking sector led the charge this week.

The current week saw Moody’s changing its outlook on Pakistan from “Negative” to “Stable” on account of improving external account position of the country on the back of the government’s corrective measures.

This was followed by up-gradation of outlook to “stable” for the Big 5 banks, spurring buying activity in the banking sector.

Trade deficit data came this week as well which once again saw an improvement, declining 36 percent YoY during November 2019.

Consolidation of the country’s reserves continued, as SBP reserves touched an 8 month high at USD 9.1 billion. The KSE-100 Index settled at 40,732 points (up 1445 points WoW).

Sector-wise positive contributions came from i) Commercial banks (645 points), ii) Oil & Gas Marketing (131 points), and iii) Power Generation & Distribution (97 points) iv) E&P (84 points), and v) Insurance (79 points). Scrip-wise positive contributions were led by HBL (155 points), MCB (144 points), UBL (87 points), BAFL (78 points) and HUBC (75 points).

Foreign buying was witnessed this week clocking-in at USD 1.1 million compared to a net sell of USD 8.1 million last week. Buying was witnessed in Fertilizer (USD 8.4 million) and OMCs (USD 2.2 million).

On the domestic front, major selling was reported by Banks / DFIs (USD 22.3 million) and Other Organization (USD 3.3 million). Average Volumes settled at 465 million shares (up by 34 percent WoW) while average value traded clocked-in at USD 105 million (up by 31 percent WoW).

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