Weekly Review: market likely to stay positive

KARACHI: The stock market likely to stay positive during the next week due to improved inflows and stability of in Pak Rupee against the US Dollar, analysts said.

Analysts at Arif Habib Limited hoped the market to remain positive in the upcoming week.

With continuation of result season, certain scrips are expected to remain under limelight.

While stability in Pak Rupee against USD given inflow of foreign funds may also keep the risk appetite of investors in-check.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.3x (2021) compared to Asia Pac regional average of 13.2x and while offering DY of ~6.2 percent versus ~2.7 percent offered by the region.

The market commenced on a positive note this week continuing positive streak from last week. During the week commercial banks remained attractive on anticipation of robust results.

Furthermore, three month low COVID-19 cases were reported which improved investor sentiment. Moreover, loans worth USD 505 million received during the week with the Pak Rupee/Parity settling at PKR 166.98/USD, also kept the momentum high.

Along with this, PKR 168 billion were raised in Treasury bill auction, with yields going up due to postponement in SBP’s monetary policy to Sep’20. The market closed at 39,258 points, gaining 1,650 points (+4.4 percent) WoW.

Sector-wise positive contributions came from i) Commercial Banks (482 points), ii) Cement (285 points), iii) Power Generation & Distribution (113 points), iv) Technology & Communication (111 points), and v) Automobile Assembler (109 points). Whereas negative contributions came from Food & Personal Care (12 points) and Vanaspati (1 points). Scrip-wise positive contributions were led by LUCK (148 points), BAHL (103 points), HBL (99 points), TRG (95 points), and HUBC (77 points).

Foreign selling continued this week clocking-in at USD 9.7 million compared to a net sell of USD 9.3 million last week. Selling was witnessed in E&P (USD 5.1 million) and Power & Distribution (USD 1.0 million). On the domestic front, major buying was reported by Mutual Funds (USD 11.3 million and Companies (USD 2.2 million).

Average volumes settled at 390 million shares (down by 6 percent WoW) while average value traded clocked-in at USD 101 million (up by 4 percent WoW).

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