Investors of Pakistan stocks may eye commitments from friendly countries as Saudi Arabia has shown consent to provide aid.
Analysts at Arif Habib Limited said commitments from other friendly countries will complete the final pre-requisite for revival of IMF program, lifting the sentiment of the local bourse.
READ MORE: Pakistan’s benchmark index sees 301 points decline
The benchmark KSE-100 Index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 3.8x (2023) compared to Asia Pac regional average of 11.4x while offering a dividend yield of ~11.3 per cent versus ~3.0 per cent offered by the region.
The market commenced on a negative note as the market participants expected interest rate hike in the monetary policy.
READ MORE: Pakistan stocks gain 634 points on Saudi Arabia’s deposit pledge
Furthermore, noise on the political front dragged the negative momentum. However, the market witnessed rally post lower than expected jump in policy rate (100bps hike).
Meanwhile, commitment of funds worth USD 2 billion from Saudi Arabia gave boost to the bullish sentiment of the market as bridging external financing gap remains one of the conditions to complete ninth review of IMF program.
The trade deficit plummeted by 60 per cent YoY to USD 1.46 billion in Mar’23 (lowest since Feb’15). However, the momentum was short-lived after Finance Minister cancelled trip to US to meet World Bank/IMF team.
READ MORE: Pakistan stocks up 30 points in sluggish participation
Whereas, the PKR depreciated against USD by PKR 0.63 | 0.22 per cent WoW, closing the week at 284.42/USD. Albeit, the market closed at 40,050 points, up by 49 points | 0.12 per cent WoW.
Sector-wise positive contributions came from i) Oil & Gas Exploration Companies (149 points), ii) Technology & Communication (90 points), iii) Power Generation & Distribution (45 points), iv) Fertilizer (41 points), and iv) Cement (32 points). Whereas, the sectors which contributed negatively were i) Auto Assembler (22 points), ii) Tobacco (17 points), and Commercial Banks (14 points). Scrip-wise positive contributors were PPL (71 points), OGDC (69 points), SYS (51 points), HUBC (43 points) and TRG (40 points).
READ MORE: Stocks end down by 203 points on lackluster participation
Meanwhile, scrip-wise negative contribution came from BAHL (36 points), MTL (19 points), PAKT (17 points), JVDC (8 points), and GHGL (8 points).
Foreigners buying was witnessed during this week, clocking in at USD 4.7 million compared to a net sell of USD 0.15 million last week. Major buying was witnessed in E&Ps (USD 3.0 million) and Banks (USD 0.8 million). On the local front, selling was reported by Insurance (USD 4.8 million) followed by Companies (USD 2.8 million). Average volumes arrived at 110 million shares (up by 19 per cent WoW) while average value traded settled at USD 10 million (down by 14 per cent WoW).
