KARACHI: The fears over Coronavirus and its impact on the economy, as well as the continuation in pressure on global equities is likely to keep market performance subdued.
That said, valuations across the board particularly in blue-chips have reached attractive levels, analysts at Arif Habib Limited said.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.9x (2020) compared to Asia Pac regional average of 11.6x and while offering DY of ~7.2 percent versus ~2.8 percent offered by the region.
A significantly lower inflationary reading for February 2020 (12.4 percent vs 14.6 percent in Jan’20) provided respite to investors as expectations of a rate cut in the MPS this month set in, creating positive sentiment in cyclical sectors (Cement sector attracted buying).
However, with the total number of Coronavirus cases in Pakistan rising to 6, and with the continuous rise in cases outside China (close to 20,000 now), the trickle-down effect of a global-sell off in equities did create pressure in the index. However, the KSE-100 Index closed at 38,220 points, up 236 points WoW (+0.62 percent)
Sector-wise negative contributions came from i) Banks (388pts) led by expectations of a rate cut this month, ii) Power generation & Distribution (49pts) and iii) Miscellaneous (10pts).
Positive contributions came from Cement primarily (329pts). Scrip-wise negative contributions were led by HBL (119pts), UBL (71pts), and BAFL (54pts) while positive contributions were led by LUCK (113pts), and DGKC (51pts).
Foreign selling continued this week clocking-in at USD 16.7 million compared to a net sell of USD 22.5 million last week.
Selling was witnessed in Cement (USD 5.1 million) and E&P (USD 3.5 million). On the domestic front, major buying was reported by Mutual Funds (USD 15.4 million) and Companies (USD 11.1 million).
Average Volumes remained stable at 243 million shares while average value traded clocked-in at USD 65 million (up by 35 percent WoW).
