KARACHI: Pakistan stocks likely to move in green with expected talks of the country with the International Monetary Fund (IMF).
Analysts at Arif Habib Limited said that after the positive news appeared that the Government and the IMF are likely to commence talks, we expect the market to remain positive next week.
READ MORE: Pakistan stocks gain 290 points on IMF visit report
Furthermore, any encouraging news coming from Saudi Arabia or from any friendly countries are expected to trigger positive momentum.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 3.9x (2023) compared to Asia Pac regional average of 11.7x while offering a dividend yield of 10.5 per cent versus 3.0 per cent offered by the region.
In the outgoing week, the market started out sluggish as inflation increased to 24.5 per cent YoY in December 2022.
READ MORE: Stocks end up amid political uncertainty keeps investors away
Furthermore, the government announced that markets and shopping areas would close by 8:30pm as this will save the Government approximately PKR 62 billion.
Additionally, the trade deficit in the last month dipped by 41 per cent to USD 2.86 billion YoY but increased by 2 per cent MoM, which was due to a decline of 3.64 per cent in exports while imports inched up by 0.41 per cent.
Moreover, FX reserves fell by another USD 245 million to USD 5.57 billion, touching the lowest level since April 2014.
READ MORE: Pakistan stocks end down in mixed trading session
In addition, PKR depreciated by PKR 0.7 | 0.31 per cent WoW against USD, closing the week at 227.14. Albeit, energy stocks remained under limelight due to potential circular debt resolution.
Whereas towards the end of the week, the market started to rally as it appeared likely that IMF and Pakistan will commence negotiations to revive the program. The index closed at 41,007 points, gaining 587 points (up by 1.45 per cent) WoW.
Sector-wise positive contributions came from i) Fertilizer (336 points), ii) E&Ps (246 points), iii) Technology (139 points), iv) Miscellaneous (133 points) and v) OMCs (47 points).
READ MORE: KSE-100 Index declines by 185 points in range bound trading
Whereas, the sectors which contributed negatively were i) Cement (126 points), ii) Power (62 points), iii) Auto Assembler (50 points), and iv) Textile Composite (30 points). Scrip-wise positive contributors were ENGRO (191 points), PPL (140 points), PSEL (124 points), TRG (79 points) and POL (74 points).
Meanwhile, scrip-wise negative contribution came from HUBC (44 points), LUCK (40 points), MEBL (37 points), NESTLE (28 points) and KEL (25 points).
Foreigners buying was witnessed during this week, clocking in at USD 0.3 million compared to a net sell of USD 16.6 million last week. Major selling was witnessed in Commercial Bank (USD 0.5 million) and All other sectors (USD 0.3 million).
On the local front, buying was reported by Companies (USD 3.2 million) followed by Brokers (USD 0.9 million). Average volumes clocked in at 176.0 million shares (down by 17.9 per cent WoW) while average value traded settled at USD 23.3 million (down by 22.7 per cent WoW).
