KARACHI: The share market likely to trade in green during the next week owing to unchanged policy rate.
Analysts at Arif Habib Limited said that the market likely to trade in green due to: central bank keeping policy rate unchanged, which is positive for the stock market; and encouraging SBP projections as monetary policy committee noted that the current account deficit is expected to remain below 1 percent of GDP for FY21 while forecasting 3 percent GDP growth for FY21.
Further, appreciation of PKR/USD parity may also impact positively.
However, any surprise 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 12.2x while offering a dividend yield of around 6.8 percent versus 2.8 percent offered by the region.
This week trading commenced on a positive note continuing the trend from last Friday due to
i) Government and their allies winning the seat of senate chairman and deputy chairman,
ii) Pakistan Democratic Movement postponing their long march which was expected to start from last week of March,
iii) Large Scale Manufacturing increasing by 7.85 percent in 7MFY21, and
iv) Continuous appreciation of Rupee against USD.
However, later in the week bears took charge and negative sentiments were fueled by
i) Anticipation of possible rate hike in the monetary policy statement,
ii) Rising cases of coronavirus as infection ratio surged to 8.0 percent, and
iii) Drop in international oil prices resulting in selling across heavy-weight E&P scrips.
The KSE-100 index closed at 44,901 points, up by 1,113 points or 2.54 percent WoW.
Contribution to the upside was led by i) Technology and Communication (296 points), ii) Commercial Banks (214 points), iii) Cements (107 points), iv) Oil and Gas Marketing Companies (89 points), and v) Refinery (61 points). Scrip-wise major gainers were TRG (227 points), HBL (140 points), SYS (66 points), UBL (64.01 points), and PSO (60 points).
Whereas, scrip-wise major losers were OGDC (41 points), ENGRO (28 points), BAHL (26 points), MARI (10 points) and PMPK (9 points).
Foreigners accumulated stocks worth of USD 3.04 million compared to a net buy of USD 3.64 million last week. Major buying was witnessed in Commercial Banks (USD 6.46 million) and Cement (USD 1.52 million).
On the local front, selling was reported by Banks (USD 11.21 million) followed by Companies (USD 8.18 million). That said, average daily volumes and traded value for the outgoing week were up by 11 percent and 4 percent to 483 million shares and USD 144 million, respectively.
