Weekly Review: rising cases of coronavirus remain challenge for trading

Weekly Review: rising cases of coronavirus remain challenge for trading

KARACHI: The stock market likely range bound during next week on the back of concerns over rising number of cases and probable government measures to contain it.

Furthermore, the result season is also over, analysts at Arif Habib Limited said.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.1x (2021) compared to Asia Pac regional average of 13.9x and while offering DY of 6.3 percent versus 2.7 percent offered by the region.

The market commenced on a positive note this week given FATF maintaining Pakistan on the grey list. Along with this, robust financial results tagged with appreciation of PKR/USD to PKR 160.62 kept the sentiment positive briefly.

However, bears overpowered the bulls after momentum of sell off in the global markets was transferred to the local bourse.

Furthermore, decline in oil prices (down by 6 percent since last week) exerted pressure on E&P stocks.

Moreover, bloodbath was witnessed after Govt. officials announced arrival of COVID-19’s second wave, with the highest number of 908 cases (16 week high | an infection ratio of 3 percent) being reported on Wednesday.

The KSE-100 index settled at 39,888 points, shedding 1,378 points (down by 3.3 percent WoW).

Sector-wise negative contributions came from i) Commercial Banks (499 points), ii) Oil & Gas Exploration Companies (247 points), iii) Fertilizer (145 points), iv) Textile Composite (131 points), and Oil & Gas Marketing Companies (103 points).

Scrip-wise negative contributions were led by HBL (149 points), UBL (134 points), POL (111 points), ENGRO (87 points) and OGDC (60 points).

Foreign selling continued this week clocking-in at USD 21.3 million compared to a net sell of USD 6.9 million last week.

Selling was witnessed in Cements (USD 7.6 million) and Commercial Banks (USD 4.9 million). On the domestic front, major buying was reported by Insurance Companies (USD 7.8 million and Individuals (USD 6.4 million).

Average volumes arrived at 470 million shares (up by 1 percent WoW) while average value traded settled at USD 117 million (up by 20 percent WoW).