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Weekly Review: market likely to stay positive on earning expectations

Karachi: The stock market likely to remain positive during the next week on the back of healthy earnings expectations, analysts said.

The analysts at Arif Habib Limited said that the market to remain positive on the back of healthy earnings expectations, which will drive the index.

Moreover, the ongoing rollout of vaccines across the globe will most likely keep equity markets buoyant.

The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.7x (2021) compared to the Asia Pac regional average of 17.9x and while offering DY of around 6.2 percent versus 2.5 percent offered by the region.

The market commenced on a positive note briefly on the back of the government and power companies reaching a master agreement, breaching 46,000 level on Monday.

Governor SBP’s statement regarding IMF program revival kept sentiment positive. Furthermore, the announcement of auto sales figures by PAMA (15 percent YoY growth in December 2020) ignited bullish sentiments in the Automobile Assemblers Sector.

Expectations of better corporate results particularly amongst cyclical sectors kept the overall sentiment buoyant.

The KSE-100 Index closed at 45,931 points, gaining 277 points (up 0.61 percent) WoW.

Sector-wise positive contributions came from:

i) Technology & Communication (168 points),

ii) Power Generation & Distribution (66 points),

iii) Engineering (41 points),

iv) Glass & Ceramic (37 points), and

v) Textile Composite (34 points).

Whereas, sectors that contributed negative included:

i) Fertilizer (63 points),

ii) Tobacco (30 points) and

iii) Oil & Gas Exploration Companies (27 points).

Scrip-wise positive contributions were led by i) SYS (89 points), ii) TRG (82 points), iii) INIL (42 points), iv) KAPCO (42 points), and v) GHGL (37 points).

Foreign selling this week clocking-in at USD 2.1 million compared to a net buy of USD 3.4 million last week. Selling was witnessed in Cement (USD 0.9 million) and FMCG (USD 0.8 million).

On the domestic front, major buying was reported by Individuals (USD 24.0 million and Banks / DFIs (USD 1.2 million).

Average volumes arrived at 682 million shares (up by 9 percent WoW). Whereas, average value traded settled at USD 129 million (down by 16 percent WoW).