KARACHI: The stock market likely to extend its bull run on the back of easing in political noise. Further, vaccine for coronavirus may also help in boosting investors’ sentiments.
Analysts at Arif Habib Limited said that the index is expected to continue extending its bull run on the back of diluting political noise.
Moreover the approval of Moderna’s vaccine is expected any time soon which is another leap forward in the battle against COVID-19.
Healthy corporate earnings are expected during second quarter of the current fiscal year which should continue fueling the positive sentiments.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) index is currently trading at a PER of 7.4x (2021) compared to Asia Pac regional average of 14.1x and while offering DY of 6.1 percent versus 2.4 percent offered by the region.
The local bourse continued its bullish momentum this week, settling at 43,741 points (up 2.3 percent WoW). This week the index also crossed a 2.5-Yr high and thus now stands at the highest level during the present government’s tenure.
US FDA’s finding of Moderna’s vaccine as “highly effective” was a big step closer to the approval of another vaccine (after Pfizer/BioNTech’s vaccine) – a major boon for global investment sentiment. This week Pakistan paid its second installment of the USD 3 billion loan from Saudi Arabia, through commercial borrowing from China.
Moreover, POL products’ prices were raised this week (up to 7.9 percent) on the back of recovery in global oil prices (Arab Light is up 19 percent MoM).
Sector-wise positive contributions came from i) Banks (342 points), ii) Fertilizers (231 points), and iii) Oil & Gas Exploration (202 points) while Power Generation & Distribution declined 37 points. Scrip-wise positive contributions were led by OGDC (112 points), FFC (95 points), MEBL (68 points), ENGRO (64 points), and PSO (63 points). HUBC and KOHC led the negative contributions, declining 43 and 15 points respectively.
Foreign selling continued this week clocking-in at USD 9.4 million compared to a net sell of USD 9.6 million last week. Selling was witnessed in Commercial Banks (USD 11.0 million) and Fertilizer (USD 1.4 million). On the domestic front, major buying was reported by Banks / DFIs (USD 7.1 million and Individuals (USD 5.1 million). Average volumes arrived at 549 million shares (up by 22 percent WoW) while average value traded settled at USD 154 million (up by 25 percent WoW).
