Weekly Review: positive sentiments likely on PM Moscow visit

Weekly Review: positive sentiments likely on PM Moscow visit

KARACHI: Pakistan’s stocks likely to stay positive during next week owing to scheduled visit of Prime Minister Imran Khan to Moscow, Russia.

Analysts at Arif Habib Limited said that the market to remain positive in the upcoming week.

PM Khan is expected to visit Moscow in the next week, with agenda of two mega gas pipeline projects in order to cater depleting gas reserves.

READ MORE: Stocks gain 235 points on declining crude oil prices

Signing of a commercial agreement during this visit will be a key catalyst. Keeping in view the ongoing result season, certain sectors and scrips are expected to stay under limelight.

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 13.9x while offering a dividend yield of 8.6 per cent versus 2.3 per cent offered by the region

The market commenced on a negative note this week on the back of tensions over possible war between Russia and Ukraine (which shot up international oil prices) tagged with prevailing political situation in the country.

READ MORE: Stocks end down by 244 points on corporate results

Albeit, the market took some respite after news of Russian troops’ withdrawal from Ukraine’s border made the rounds. However, market sentiment remained subdued throughout the week owed to an increase in local petroleum prices which raised concerns over inflation.

Furthermore, the massive jump in trade deficit by 93 per cent YoY in 7MFY22 fuelled the negative sentiment.

Moreover, below expectation financial result of certain scrips further deteriorated the momentum. Whereas, passing of Oil and Gas Regulatory Authority (Amendment) Bill, 2022 and Weighted Average Cost of Gas (WACOG) Bill by Senate kept gas utilities and certain scrips of OMCs and E&Ps in the limelight, cushioning the overall dip. The market closed at 45,676 points, losing 403points (down by 0.9 per cent) WoW.

READ MORE: Stocks shed 47 points on inflation concerns

Sector-wise negative contributions came from i) Commercial Banks (88 points), ii) Fertilizers (68 points), iii) Power Generation & Distribution (66 points), iv) Technology & Communication (39 points), and v) Cement (37 points). Whereas, sectors which contributed positively were i) Automobile Assembler (9 points), ii) Chemical (9 points) and iii) Oil & Gas Exploration (5 points). Scrip-wise negative contributors were HUBC (67 points), ENGRO (62 points), MEBL (36 points), SYS (35 points) and DAWH (34 points). Meanwhile, scrip-wise positive contribution came from EFERT (55 points), SNGP (24 points) and MTL (22 points).

READ MORE: KSE-100 index gains 88 points in range-bound trading

Foreign selling continued this week, clocking-in at $1.97 million compared to a net sell of $5.9 million last week. Major selling was witnessed in Technology ($1.5 million) and Commercial Banks ($0.5 million). On the local front, buying was reported by Banks ($4.9 million) followed by Individuals ($2.4 million). Average volumes clocked-in at 191 million shares (down by 8 per cent WoW) while average value traded settled at $30 million (down by 36 per cent WoW).

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