KARACHI: The stock market likely to pick pace next week as result season is about to commence, analysts said. They said that cyclical sectors can once again attract the limelight on the back of robust economic activity.
Moreover, oil prices have continued to remain downwards sticky with no outcome on the oil output increase, which could spur buying in E&P scrips.
That said, fears over the COVID fourth wave could keep the sentiment cautious.
The benchmark KSE-100 of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.8x (2021) compared to Asia Pac regional average of 16.2x while offering a dividend yield of ~6.9 per cent versus ~2.3 per cent offered by the region.
Equities continued to depict a range bound behavior for another week. This week saw Pakistan raising USD 1 billion through a “tap issue” from Eurobonds, at even better pricing than the issue in April earlier this year. That said, a spike in COVID cases (infection ratio has risen to 3.65 per cent compared to an average of 1.7 per cent in the last two weeks) has kept the confidence in the bourse in check.
Moreover, uncertainty over how the geopolitical scenario pans out with regards to the US exit from Afghanistan, and Pakistan’s crucial role in this, has also kept sentiment jittery. The index closed at 47,563 points, down by 0.3 per cent / 123 points WoW.
Sector-wise negative contributions came from i) Oil & Gas Exploration Companies (68 points), ii) Tobacco (57 points), iii) Refinery (49 points), iv) Textile Composite (41 points), and v) Food & Personal Care Products (36 points). Whereas, the sectors that contributed positive include i) Commercial Banks (127 points), ii) Fertilizer (50 points), iii) Technology & Communication (50 points), iv) Inv.Banks/Inv.Cos./Securities Cos. (10 points) and Chemical (6 points). Scrip-wise negative contributors were PAKT (58 points), UNITY (39 points), NRL (37 points), PPL (28 points) and ANL (21 points). Whereas, scrip-wise positive contribution came from HBL (88 points), TRG (43 points), MEBL (35 points), EFERT (31 points) and AGP (26 points).
Foreign selling continued this week clocking-in at USD 5.2 million compared to a net sell of USD 8.4 million last week. Selling was witnessed in Other sectors (USD 5.4 million) and Food sector (USD 1.1 million). On the domestic front, major buying was reported by companies (USD 4.1 million and Mutual funds (USD 3.9 million). Average volumes arrived at 486 million shares (down by 22 per cent WoW) while average value traded settled at USD 107 million (down by 1 per cent WoW).