KARACHI: The stock market likely to trade in green as clouds of FATF-led uncertainty have dispersed besides ceasefire at Line of Control (LOC) may further boost investors’ sentiments.
Analysts at Arif Habib Limited said that the market to remain positive in the upcoming weeks as clouds of FATF-led uncertainty have dispersed and with only 3 action plans to be addressed, the likelihood of Pakistan exiting the Grey list in June 2021 are very bright.
Moreover, ceasefire across the line of control (LOC) with India is a massive feat on the political front and will further aid stability in the regional climate.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.2x (2021) compared to Asia Pac regional average of 17.1x and while offering DY of ~6.8 percent versus ~2.5 percent offered by the region.
The index remained under pressure this week in anticipation of FATF’s plenary meeting (scheduled 22nd to 25th February 2021), whereby Pakistan retained its status in the Grey List and has until June 2021 to meet 3 of the 27 initial action points.
Albeit, a relief rally was witnessed on Thursday as valuations opened up and robust dividend announcement from UBL lured bulls. Moreover, another CAD was posted in January 2021 at USD 229 million in January 2021 vs. USD 652 million in December 2020 while FDI for 7MFY21 underwent a 27 percent dip YoY to USD 1.145 billion compared to USD 1.577 billion in SPLY.
That said, the benchmark KSE-100 closed at 45,865 points, down by 0.8 percent or 363 points.
Sector-wise negative contributions came from i) Oil & Gas Exploration Companies (107 points), ii) Commercial Banks (105 points), and iii) Oil & Gas Marketing Companies (78 points). Whereas sectors that contributed positively include i) Cement (119 points), ii) Technology (53 points), and iii) Textile weaving (7 points). Scrip-wise negative contributors were OGDC (92 points), PSO (42 points) and NBP (41 points) while positive contributors included LUCK (160 points), TRG (56 points) and MEBL (28 points).
Foreign buying this week clocking-in at USD 0.3 million compared to a net sell of USD 0.6 million last week. Buying was witnessed in Cement (USD 2.6 million) and Technology and Communication (USD 2.2 million). On the domestic front, major selling was reported by Broker Proprietary Trading (USD 10.7 million and Mutual Fund (USD 4.9 million). Average volumes arrived at 589 million shares (down by 1 percent WoW) while average value traded settled at USD 159 million (up by 0.01 percent WoW).
