KARACHI: The stock market is likely to trade in positive territory during next week owing to Pakistan’s exit from the grey list of Financial Action Task Force (FATF).
Analysts at Arif Habib Limited said that the market is expected to remain positive in the upcoming week as the participants will celebrate the removal of Pakistan from FATF’s grey list.
Furthermore, in case of materialization of inflow of $1.5 billion from Asian Development Bank (ADB), the market will respond positively. However, the political noise will keep the market in check.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.1x (2023) compared to Asia Pac regional average of 12.2x while offering a dividend yield of 9.8 per cent versus 3.0 per cent offered by the region.
The market commenced on a negative note this week amid hustle and bustle in the political arena. Furthermore, the Pakistani Rupee remained under pressure against the greenback, closing at PKR 220.84 (down by PKR 2.41 | 1 per cent WoW).
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Furthermore, the foreign exchange reserves of State Bank of Pakistan (SBP) remained unchanged at $7.6 billion this week. In addition to this, the Foreign Direct Investment (FDI) declined by 47 per cent YoY during the first quarter of fiscal year 2022/2023.
The momentum shifted towards the green zone since the current account deficit narrowed by 72.5 per cent YoY to $316 million during September 2022 (lowest since April 2021).
Furthermore, a statement from the USA showing confidence in Pakistan’s nuclear energy strengthened the sentiment.
Moreover, a loan worth $1.5 billion from ADB was finalized during the week, which kept the momentum strong. The market closed at 42,213 points, gaining 265 points (up by 0.63 per cent) WoW.
Sector-wise positive contributions came from i) Fertilizer (112 points), ii) Power (82 points), iii) E&Ps (49 points), iv) Banks (37 points) and v) Tobacco (31 points). Whereas, sectors which contributed negatively were i) Technology (40 points), and ii) Chemical (28 points).
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Scrip-wise positive contributors were HUBC (80 points), ENGRO (77 points), MARI (51 points), POL (44 points) and MTL (40 points). Meanwhile, scrip-wise negative contributions came from PPL (31 points), PSO (26 points), SYS (19 points), TRG (18 points) and EPCL (16 points).
Foreigners selling was witnessed during this week, clocking in at $3.4 million compared to a net buy of $12.3 million last week. Major selling was witnessed in Commercial Banks ($1.9 million), Technology ($1.1 million) and All Other Sectors ($0.9 million). On the local front, buying was reported by Individuals ($5.4 million) followed by Broker Proprietary Trading ($0.9 million).
Average volumes clocked in at 228 million shares (down by 14 per cent WoW) while average value traded settled at $28 million (down by 35 per cent WoW).
