KARACHI: Stock market likely to maintain upward trajectory during upcoming week owing to positive sentiments on improved foreign exchange reserves and stable exchange rate.
Analysts at Arif Habib Limited said that the market to maintain the upwards trajectory in the upcoming month.
Meanwhile, Prime Minister Imran Khan will visit Karachi on Saturday, in which important development projects are expected to be announced for the rain-stricken city.
Sentiment in specific sectors may be influenced by their respective results. Given foreign reserves rising, Pak Rupee stabilizing and cyclical demand increasing investor sentiment is expected to remain optimistic.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.5x (2020) compared to Asia Pac regional average of 18.4x and while offering DY of 6.0 percent versus 2.7 percent offered by the region.
The market continued the positivity this week. With CPI declining on yearly and monthly basis to 8.21 percent, a strong momentum was built which took the index beyond the 42,000 level (since 28th January 2020).
Moreover, Pak Rupee appreciated against greenback at PKR 165.77, which kept the sentiment positive. Furthermore, oil sales in the month of August 2020 witnessed a jump of 21 percent YoY.
Average weekly volume skyrocketed to levels last seen in 2005 as liquidity continued flushing into the equity market, making it the best stock market in the World on weekly basis. The KSE-100 closed at 42,023 points (up by 967 points / 2.4 percent WoW).
Sector-wise positive contributions came from i) Cements (194 points), ii) Oil & Gas Marketing Companies (114 points), iii) Fertilizer (103 points), iv) Chemical (83 points), and v) Textile Composite (82 points). On the other hand, negative contributions came from Automobile Assembler (23 points) and Power Generation & Distribution (13 points). Scrip-wise positive contributions were led by SYS (65 points), HASCOL (65 points), COLG (55 points), MLCF (53 points) and MARI (53 points).
Foreign selling continued this week clocking-in at USD 10.0 million compared to a net sell of USD 0.8 million last week. Selling was witnessed in Commercial Banks (USD 5.2 million) and Cement (USD 2.6 million). On the domestic front, major buying was reported by Individuals (USD 15.4 million and Mutual Funds (USD 8.6 million). Average volumes settled at 745 million shares (up by a massive 70 percent WoW), which is the highest weekly average volume since 7th Mar’05. While average value traded clocked-in at USD 139 million (up by 37 percent WoW).