Weekly Review: stock market likely to move in positive zone

KARACHI: Pakistan stocks likely to move in positive zone during next week with the expectation of loan disbursement from IMF.

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

With the expectation of disbursement of loan from IMF conditional upon approval from the Executive Board, the investor sentiment is expected to remain positive.

Furthermore, with the ongoing result season, certain sectors and scrips are likely to remain in the limelight in anticipation of strong results.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.4x (2022) compared to Asia Pac regional average of 12.5x while offering a dividend yield of 8.8 per cent versus 2.8 per cent offered by the region.

The three-day week commenced on a positive note amid optimism over the disbursement of IMF loan in the coming weeks, which will further bring in loans and investments from friendly countries and international financial institutions.

Furthermore, Pak Rupee strengthened again this week against the greenback, appreciating by PKR 8.55/ USD (3.82 per cent) WoW to close at PKR 215.49.

Moreover, investor confidence further improved after Pakistan received letter of intent from IMF (which indicates disbursement of a USD 1.7bn tranche for the combined seventh and eighth review). The market closed at 42,858 points, gaining 761 points (up by 1.8 per cent) WoW.

Sector-wise positive contributions came from i) Banks (224 points), ii) E&Ps (205 points), iii) Power (84 points), iv) Automobile Assembler (55 points) and v) OMCs (53 points). Whereas, sectors which contributed negatively were i) Cement (23 points) and ii) Tobacco (15 points).

Scrip-wise positive contributors were OGDC (79 points), PPL (69 points), MEBL (67 points), POL (56 points) and HUBC (52 points). Meanwhile, scrip-wise negative contribution came from PSEL (63 points), NESTLE (17 points), EPCL (16 points) and PAKT (15 points).

Foreigners selling continued this week, clocking in at $ 0.9 million compared to a net sell of $ 0.7 million last week. Major selling was witnessed in Banks ($ 1.6 million) and Cement ($ 1.3 million). On the local front, buying was reported by Individuals ($ 5.1 million) followed by Other Organizations ($ 0.4 million).

Average volumes clocked in at 343 million shares (up by 31 per cent WoW) while average value traded settled at $ 48 million (up by 41 per cent WoW).