October 10, 2024
Weekly Review: political unrest may impact market

Weekly Review: political unrest may impact market

KARACHI: The stock market is likely to trade in range bound owing to ongoing political uncertainty after a no-confidence motion moved against the prime minister.

Analysts at Arif Habib Limited said the market to remain range bound next week due to political unrest and the upcoming vote of no confidence.

READ MORE: Pakistan stocks gain 29 points amid dull trading

On the international front, any de-escalation in Russia-Ukraine tensions could propel a rebound in markets.

Market participants should also remain wary of high commodity prices, any indication of oil prices cooling down would also aid the sentiment in the local bourse.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.7x (2022) compared to Asia Pacific regional average of 12.4x while offering a dividend yield of 9.2 per cent versus 2.5 per cent offered by the region.

READ MORE: Pakistan stocks gain 319 points amid volatile trading

This week the market remained sluggish due to domestic political uncertainty and slow progress on the negotiation with the IMF.

Although the market gained some momentum amid 78 per cent MoM contraction in the current account during February 2022 coupled with a landmark agreement on the Reko Dig between the Federal government, Government of Baluchistan and Barrick Gold Corporation, this remained short lived.

READ MORE: Stocks witness range bound activity on rupee fall

Rising cut off rates in the treasury bills auction, signaling monetary tightening, as well as the rupee weakening to its historic low, crossing the 181/USD mark, kept the index range bound.

The market settled at 43,551 points, gaining 522 points (up by 1.2 per cent) WoW.

Sector-wise negative contributions came from i) Automobile Parts & Accessories (16 points), ii) Paper & Board (6.95 points), iii) Miscellaneous (6.29 points), iv) Oil & Gas Exploration (4.02 points), and v) Insurance (2.58 points).

READ MORE: Pakistan stocks up 200 points on Reko Diq deal renewal

Whereas, sectors which contributed positively were i) Fertilizer (160 points), ii) Cement (97 points) iii) Power Generation & Distribution (57 points), iv) Commercial Banks (56 points) and v) Chemical (47 points). Scrip-wise negative contributors were SYS (42 points), UBL (41 points), BAHL (25 points), THALL (16 points) and HMB (11 points). Meanwhile, scrip-wise positive contributions came from HBL (93 points), LUCK (84 points), FFC (72 points), TRG (64 points) and HUBC (52 points).

READ MORE: Weekly Review: political unrest to keep stocks under pressure

Foreign selling continued this week, clocking-in at USD 4.12 million compared to a net sell of USD 4.90 million last week. Major selling was witnessed in Banks (USD 5.9 million) and E&P’s (USD 0.8 million). On the local front, buying was reported by Mutual Funds (USD 5.3 million) followed by Individuals (USD 2.6 million).

Average volumes clocked-in at 143.7 million shares (down by 17.4 per cent WoW) while average value traded settled at USD 25.8 million (down by 1.5 per cent WoW).