KARACHI: The stock market likely to stay positive during next week due to expected release of IMF’s next tranche to Pakistan.
Analysts at Arif Habib Limited said that Pakistan and IMF 6th Review scheduled for next week (February 2, 2022), any positive outcome could be a key trigger for the local bourse.
Moreover, with the ongoing result season, certain sectors and scrips are expected to stay under limelight.
READ MORE: Stocks end flat amid profit taking
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.1x (2022) compared to Asia Pac regional average of 13.6x while offering a dividend yield of ~8.6 per cent versus ~2.4 per cent offered by the region.
The market commenced on a negative note this week, given concerns over expectations of hike in policy rate. The market turned green after Monetary Policy Committee (MPC) kept the policy rate unchanged.
READ MORE: Pakistan stocks gain amid concerns over rising oil prices
However, momentum remained in check given hefty surge in international oil prices, climbing up to a 7-Yr high which raised concerns over inflation.
Moreover, rising COVID-19 cases and postponement of IMF’s review kept the market range bound. Meanwhile, reduction in cut-off yields of government’s Market Treasury Bills by 68 bps provided resistance against bears.
READ MORE: Stocks end up 67 points amid range bound trading
Furthermore, the market welcomed the passing of SBP bill 2021 by Senate, since it is now most likely that disbursement of $1 billion will be approved by the Executive Board of IMF in the next scheduled meeting.
The market closed at 45,078 points, gaining 60 points (up by 0.13 per cent) WoW.
Sector-wise positive contributions came from i) Cement (55 points), ii) Power Generation & Distribution (45 points), iii) Food & Personal Care Products (30 points), iv) Fertilizer (26 points), and v) Commercial Banks (24 points). Whereas, sectors which contributed negatively were i) Technology & Communication (52 points), ii) Oil & Gas Exploration Companies (50 points) and iii) Automobile Assembler (14 points). Scrip-wise positive contributors were HUBC (50 points), BAFL (38 points), LUCK (36 points), FFC (32 points) and TRG (30 points). Meanwhile, scrip-wise positive contribution came from KAPCO (30 points), MARI (24 points) and BAHL (23 points).
READ MORE: Stocks fall on rising COVID cases
Foreign selling continued this week, clocking-in at USD 4.0 million compared to a net sell of USD 2.09 million last week. Major selling was witnessed in Technology and Communication (USD 2.4 million) and Cement (USD 1.3 million). On the local front, buying was reported by Companies (USD 19.5 million) followed by Mutual Funds (USD 4.8 million). Average volumes clocked-in at 187 million shares (down by 7 per cent WoW) while average value traded settled at USD 38 million (down by 9 per cent WoW).
