KARACHI: The stock market is likely to witness range-bound activities during next week. The analysts said that the current account deficit may be a major concern for the investors.
The analysts at Arif Habib Limited said that the concerns persist over how manageable the deficit on the current account may be.
However, the IMF review may note some positive progress especially on the back of impressive recent tax numbers for July-August (23 percent higher than the target).
The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.9x (2021) compared to the Asia Pac regional average of 14.5x while offering a dividend yield of 7.0 percent versus 2.2 percent offered by the region.
The domestic bourse closed in red this week primarily on account of augmenting concerns on the external account. As per media reports, imports clocked in at PKR 6.3bn for Aug’21 taking the trade deficit to Rs4 billion, which is the highest ever for a single month. The local currency has continued to slide downwards with the PKR/USD settling at 166.9. Meanwhile, the cement sector has also seen pressure this week with coal prices continuing to soar. The index closed at 46,957 points, down 179 points WoW.
Sector-wise negative contributions came from i) Commercial Banks (301 points), ii) Cement (100 points), iii) Automobile Assembler (77 points), iv) Textile composite (20 points), and v) Oil & Gas Marketing Companies (19 points).
Whereas sectors which contributed positively were i) Technology & Communication (176 points), ii) Power Generation & Distribution (77 points) and iii) Refinery (51 points). Scrip-wise negative contributors were HBL (105 points), MEBL (80 points), UBL (63 points), MCB (48 points) and MLCF (24 points). Meanwhile, scrip-wise positive contributions came from SYS (141 points), HUBC (82 points), and TRG (33 points).
Foreign selling continued this week, settling at USD 5.9 million against a net sell of USD 5.4 million last week. Selling was witnessed in Commercial Banks (USD 4.3 million), Cement (USD 1.3 million), and Exploration and Production (USD 0.8 million).
On the domestic front, major buying was reported by Individuals (USD 5.1 million) and Insurance Companies (USD 4.0 million).
Average volumes clocked in at 462 million shares (up by 20 percent WoW) while average value traded settled at USD 83 million (up by 5 percent WoW).
