Weekly Review: political unrest to keep stocks under pressure

Weekly Review: political unrest to keep stocks under pressure

KARACHI: Pakistan stocks likely to stay under pressure during next week owing to political unrest, analysts said.

Analysts at Arif Habib Limited said that domestic political unrest together with opposition’s planned long march against the government, is likely to keep the bourse under pressure. A key event to look out for is the OIC meeting.

READ MORE: Pakistan stocks plunge 777 points on rupee devaluation

On the international front, any de-escalation by Russia and successful negotiation with the West may push the commodity prices down, which will improve sentiment of 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 Pac regional average of 12.4x while offering a dividend yield of 9.2 per cent versus 2.4 per cent offered by the region.

READ MORE: Equities slip by 168 points in range bound trading

The domestic bourse commenced on a negative note amid investor’s concerns over the outcome of probable Russia Ukraine war together with prevailing political tensions within the country

Albeit, net buying was observed mid-week as the investor’s cheered a dip in global oil prices (WTI and Brent fell below USD 100/bbl. mark) together with peace talks between Russia and Ukraine.

In particular, the cement sector remained in limelight following a decline in coal prices. Albeit, as the week neared its end, the bourse failed to sustain gains on the back of rupee weakening to its historic low, breaching the 180 mark, and resumption of surge in oil prices. The market settled at 43,030 points, losing 777 points (down by 1.42 per cent) WoW.

READ MORE: Pakistan stocks gain 256 points on easing oil prices

Sector-wise negative contributions came from i) Oil & Gas Exploration Companies (310 points), ii) Bank (127 points), iii) Technology & Communication (79 points), iv) Oil & Gas Marketing (42 points), and v) Cement (39 points). Whereas, sectors which contributed positively were i) Fertilizer (96 points), ii) Food & Personal Care Products (15 points) and iii) Leather and Tanneries (14 points). Scrip-wise negative contributors were PPL (140 points), OGDC (103 points), TRG (84 points), HBL (63 points) and MCB (43 points). Meanwhile, scrip-wise positive contribution came from FFC (91 points), EFERT (58 points) and BAHL (32 points).

READ MORE: Pakistan equities gain 353 points as oil prices ease

Foreign selling continued this week, clocking-in at USD 4.90 million compared to a net sell of USD 3.13 million last week. Major selling was witnessed in Banks (USD 6.0 million) and OMC’s (USD 0.7 million).

On the local front, buying was reported by Banks/DFIs (USD 4.4 million) followed by Companies (USD 2.9 million). Average volumes clocked-in at 174 million shares (down by 19 per cent WoW) while average value traded settled at USD 26 million (down by 32 per cent WoW).