KARACHI: Sentiments of stock market likely to return on expectations of IMF loan program back on track.
According to analysts at Arif Habib Limited, Pakistan Stock Market (PSX) is likely to see an improvement in market sentiments due to the expected resumption of the IMF loan program.
The analysts noted that assurances from “friendly countries” to fund a balance of payments gap are awaited to secure the IMF deal.
READ MORE: PSX gains 79 points amid optimism of early IMF SLA
The materialization of this commitment will help put the IMF program back on track and boost the index’s sentiment. The benchmark KSE-100 index of PSX is currently trading at a PER of 3.8x (2023) compared to the Asia Pac regional average of 11.5x while offering a dividend yield of 11.3 per cent versus 3.0 per cent offered by the region.
READ MORE: Pakistan stocks gain 321 points on UAE’s assurance to IMF for loan program
The PSX started on a negative note due to uncertainty over the resumption of the IMF program. However, mid-week, the IMF’s Director Middle East and Central Asian Department expressed confidence that a Staff Level Agreement (SLA) with Pakistan would be signed soon.
This boosted the index’s sentiment, and Pakistan received seven months’ high remittances of USD 2.5 billion during March 2023, which also helped.
READ MORE: KSE-100 index ends in negative territory on inflow delays
The market closed at 40,206 points, up 155 points (up by 0.4 per cent) WoW. The sectors that contributed positively were Technology & Communication, Commercial Banks, Oil & Gas Exploration Companies, Food & Personal Care Products, and Cement, while Miscellaneous, Tobacco, and Fertilizer contributed negatively.
Foreigners buying continued during this week, with USD 1.4 million compared to a net buy of USD 3.9 million last week. Major buying was witnessed in all other sectors and Commercial Banks.
READ MORE: Pakistan equities end down by 214 points in range bound trading
On the local front, selling was reported by Mutual Funds followed by Companies. Average volumes arrived at 84 million shares (down by 24 per cent WoW) while the average value traded settled at USD 8 million (down by 28 per cent WoW).
