KARACHI: The stock market likely to remain range bound during next week owing to political uncertainty and concerns over coronavirus.
Analysts at Arif Habib Limited said that the market to remain range-bound given political uncertainty followed by continuing concerns over coronavirus.
At present, Turkish President Erdogan is in Islamabad for business-to-business focused meetings, aiming to improve trade ties between both the countries.
Furthermore, with foreign exchange reserves climbing up to $18.7 billion, up by 91 million WoW, Pak Rupee is expected to remain stable against greenback – major positive for foreign investment in equities.
The benchmark KSE-100 index of Pakistan Stock Exchange is currently trading at a PER of 6.9x (2020) compared to Asia Pac regional average of 12.2x and while offering DY of ~ 6.8 percent versus ~2.8 percent offered by the region.
The market commenced on a negative note echoing last week’s negative sentiment amid uncertainty regarding performance review talks between Govt. and IMF team.
Furthermore, concerns over rising inflation (14.6 percent) and 12-month T-bill yield (39 basis points up during the auction this week) tagged with dampened sentiment from international markets due to coronavirus took the index below 40,000 points.
Bulls returned later in the week after IMF and Govt. agreed not to introduce a mini-budget. The market closed at 40,243 points, up by 100 points WoW.
Sector-wise positive contributions came from i) Commercial Banks (123 points), ii) Cement (63 points), iii) Power Generation & Distribution (55 points), iv) Tobacco (24 points), and v) Insurance (-12 points). Scrip-wise positive contributions were led by HBL (92 points), HUBC (83 points), LUCK (45 points), MCB (39 points) and PAKT (24 points).
Foreign selling continued this week clocking-in at USD 11.2 million compared to a net sell of USD 14.2 million last week. Selling was witnessed in Commercial Banks (USD 3.6 million) and Exploration & Production (USD 3.1 million).
On the domestic front, major buying was reported by Insurance Companies (USD 8.8 million) and Other Organizations (USD 5.6 million).
Average Volumes remained stable at 168 million shares while average value traded clocked-in at USD 40 million (down by 11 percent WoW).
