KARACHI: The continuous decline in rupee value is likely to haunt the stock market during the next week as analysts forecast range bound activity.
The analysts at Arif Habib Limited said that the market is likely range bound in the upcoming week amid concerns over Pakistani Rupee (PKR) depreciation and inflation.
That said, valuations across the board particularly in blue-chips have reached attractive levels.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.2x (2023) compared to Asia Pac regional average of 12.2x while offering a dividend yield of 9.8 per cent versus 2.8 per cent offered by the region
The market remained range bound this week on the back of weak economic indicators and political uncertainty.
The official foreign exchange reserves of the State Bank of Pakistan (SBP) declined to $8.62 billion this month, putting further pressure on the PKR which continued to weaken against greenback to settle at PKR 236.84 (down by PKR 3.8 per cent WoW).
Moreover, there was an 8 per cent growth in remittances this month increasing to $2.7 billion from $2.5 billion in the previous month. Furthermore, FATF concluded its onsite visit to Pakistan on Wednesday.
Overall the market remained lackluster. The market closed at 41,679 points, losing 269points (down by 0.64 per cent) WoW.
Sector-wise negative contributions came from i) Commercial Bank (172 points), ii) Fertilizer (89 points), iii) Cement (76 points), iv) Oil & Gas Exploration Companies (75 points) and v) Food & Personal Care Products (43 points).
Whereas, sectors which contributed positively were i) Technology & Communication (231 points), ii) Power Generation & Distribution (55 points), and Automobile Assembler (29 points).
Scrip-wise negative contributors were HBL (81 points), FFC (54 points), MEBL (35 points), PPL (28 points) and HMB (24 points). Meanwhile, scrip-wise positive contribution came from TRG (248 points), HUBC (51 points), UBL (25 points), MTL (24 points) and COLG (18 points).
Foreigners buying was witnessed this week, clocking in at $13.8 million compared to a net sell of $2.82 million last week. Major buying was witnessed in Technology ($11.0 million) and other sectors ($3.1 million).
On the local front, selling was reported by Insurance ($8.5 million) followed by Mutual Funds ($3.6 million). Average volumes clocked in at 183 million shares (up by 32 per cent WoW) while average value traded settled at $30 million (up by 46 per cent WoW).