KARACHI: The stock market likely to remain positive during the next week owing to rising foreign investment in debt securities.
Analysts at Arif Habib Limited said that market to remain positive in the upcoming week.
As per expectation, policy rate remained unchanged at 13.25 percent. With current account deficit turning surplus at USD 99 million in October 2019 and foreign reserves rising amid investment in T-Bills (reaching USD 1bn) from July 2019 to date, positive sentiments are expected to persist.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) index is currently trading at a PER of 6.5x (2020) compared to Asia Pac regional average of 13.5x and while offering DY of ~8.4 percent versus ~2.6 percent offered by the region.
The market commenced on positive note this week, breaching 38,000 points level (last witnessed in April’19), amid continued confidence in business climate.
Furthermore, IMF approved issue of sovereign guarantees worth Rs250 billion for tackling circular debt which improved sentiment in the power sector.
However, during the week bears briefly rushed in amid profit taking, implementation of axle load policy and higher inflationary readings causing concerns over delay in SBP’s policy rate cut.
Albeit, the fear was temporary as as steep rally was witnessed as the week closed on Friday.
That said, the benchmark KSE-100 Index gained 342 points (up by 0.9 percent) WoW, settling at 37,926 points.
Sector-wise positive contributions came from i) Power Generation & Distribution (140 points), ii) Fertilizer (102 points), and iii) Oil & Gas Marketing Companies (66 points) while negative contributions were led by i) Commercial Banks (74 points), ii) Transport (15 points) and iii) Refinery (11 points). Scrip-wise positive contributions were led by HUBC (132 points), FFC (94 points), PSO (40 points), LUCK (32 points) and NATF (29 points).
Foreign buying was witnessed this week clocking-in at USD 8.5 million compared to a net buy of USD 4.2 million last week.
Buying was witnessed in Commercial Banks (USD 6.7 million) and Fertilizer (USD 3.6 million). On the domestic front, major selling was reported by Banks / DFIs (USD 15.2 million) and Insurance Companies (USD 2.6 million).
Average Volumes settled at 331mn shares (up by 6 percent WoW) while average value traded clocked-in at USD 74 million (up by 15 percent WoW).
