KARACHI: The stock market is likely to stay positive during next week owing to upcoming IMF talks and ease in infection cases of coronavirus.
Analysts at Arif Habib Limited said that the market to remain positive in the upcoming week attributable to talks with IMF for the sixth tranche to start at the end of the current month.
On the other hand, the decline in the infection ratio of the novel coronavirus in Pakistan and a slowdown in global oil prices would relieve pressure off the external account.
However, current macro-economic concerns such as rising imports, higher inflation due to increasing petroleum prices and pressure on currency could deteriorate investors’ sentiment.
The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.8x (2021) compared to the Asia Pacific regional average of 14.4x while offering a dividend yield of 7.9 per cent versus 2.3 per cent offered by the region.
During the outgoing week, trading activity remained jittery amid macro-economic concerns which included: Rupee slumping to an all-time low of 169.1 against USD; expectation of higher current account deficit due to rising imports which could stress reserves; temporary suspension of gas supply to general industries; and higher international commodity prices.
However, sentiment started reviving amid i) some recovery in the currency parity, ii) slowdown in Covid-19 cases which resulted in relaxation in restrictions in Sindh, and iii) restoration of gas supply to general industries.
As a result, the KSE-100 index closed at 46,636 points, down by 562 points or 1.19 per cent WoW.
Sector-wise negative contributions came from i) Cement (287 points), ii) Refinery (55 points), iii) Oil & Gas Marketing Companies (54 points), iv) Food & Personal Care Products (51 points), and v) Technology & Communication (44 points).
Whereas sectors which contributed positively were i) Commercial Banks (130 points), ii) Tobacco (6 points) and iii) Synthetic & Rayon (5 points). Scrip-wise negative contributors were LUCK (131 points), MEBL (102 points), SYS (70 points), MLCF (43 points) and DGKC (41 points).
Meanwhile, scrip-wise positive contribution came from UBL (73 points), HBL (56 points) and FFC (50 points).
Foreigners offloaded stocks worth of USD 10.9 million compared to a net sell of USD 18.6 million last week. Major selling was witnessed in Commercial Banks (USD 12.7 million) and All other Sectors (USD 2.2 million). On the local front, buying was reported by Individuals (USD 16.8 million) followed by Banks/DFI (USD 7.3 million). Average volumes clocked in at 400 million shares (down by 7 per cent WoW) while average value traded settled at USD 90 million (up by 3 per cent WoW).
