KARACHI: The stock market likely to move in positive zone during next week owing to financial results and improved exchange rate.
Analysts at Arif Habib Limited said that the market to remain bullish in the upcoming week. With the commencement of result season, we believe Oil and cyclical sectors will be under limelight on the back of healthy earnings expectations.
Additionally improvement in macroeconomic indicators and appreciation of PKR/USD parity will keep investors’ sentiments positive.
However, any further increase in domestic COVID-19 infection ratio may dampen investor’s sentiments.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.8x (2021) compared to Asia Pac regional average of 16.3x while offering a dividend yield of around 7.1 percent versus 2.6 percent offered by the region.
This week trading commenced on a negative note with the index retreating by 208 points on Monday amidst the ongoing third wave of Covid-19 (threat of lockdown as per NCOC’s proposal given rise in infection ratio).
However, bulls took charge on Tuesday as positive sentiments were fueled by i) Slowdown in infection ratio, ii) Surge in international oil prices by 3.6 percent WoW resulting in buying across heavy-weight E&P scrips, iii) Expectation of outstanding quarterly results, iv) Large Scale Manufacturing inching up by 7.45 percent in 8MFY21, and v) Forex reserves climbing to a 5-year high of $23.2 billion. The KSE-100 index closed at 45,306 points, up by 119 points or 0.26 percent WoW.
Contribution to the upside was led by i) Commercial Banks (81 points), ii) Technology and Communication (78 points), iii) Fertilizer (43 points), iv) Automobile Assemblers (25 points), and v) Oil and Gas Exploration Companies (18 points). Scrip-wise major gainers were TRG (60 points), FFC (60 points), BAHL (22 points), EFERT (21 points), and HBL (20 points). Whereas, scrip-wise major losers were ENGRO (47 points), HUBC (27 points), PSO (27 points), SEARL (21 points) and DGKC (20 points).
Foreigners offloaded stocks worth of $1.0 million compared to a net sell of $9.5 million last week. Major selling was witnessed in all other Sectors (USD 2.64mn) and Commercial Banks (USD 1.31mn). On the local front, buying was reported by Individuals (USD 9.77mn) followed by Other Organization (USD 3.91mn). That said, average daily volumes and traded value for the outgoing week were down by 10 percent and 18 percent to 368mn shares and USD 100mn, respectively.
