KARACHI: The stock market likely to move positive during next week owing to strengthening of Pak Rupee against the dollar and stable external position.
However, third wave of COVID-19 is ongoing and smart lockdowns are being placed to counter it hence the element of uncertainty cannot be ignored, analysts at Arif Habib Limited said.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 6.8x (2021) compared to Asia Pac regional average of 17.0x and while offering DY of around 7.0 percent versus 2.6 percent offered by the region.
The market commenced this week on a positive note. Amid expectation of supportive policies for refineries, the refinery sector remained in the limelight.
With inflows of foreign funds, the SBP reserves climbed up by USD 275 million WoW, PKR/USD parity settled at PKR 154.59 (which is the strongest parity since March 06, 2020).
Additionally, Current Account Deficit for the month of February 2021 witnessed 75 percent YoY/76 percent MoM decline.
Moreover, the IMF agreed to release USD 500 million to Pakistan. However, in order to comply with IMF conditions an ordinance for withdrawing corporate tax exemptions was signed by the President, which somewhat suppressed sentiment in the bourse.
Furthermore, recent surge in COVID-19 cases (4,368 new cases yesterday with infection ratio standing at 10.3 percent) sent alarm bells ringing. The market closed at 45,522 points, gaining 620 points (up by 1.4 percent) WoW.
Sector-wise positive contributions came from i) Technology & Communication (333 points), ii) Oil & Gas Exploration Companies (94 points), iii) Auto Assembler (71 points), iv) Refinery (62 points) and v) Chemical (50 points).
Whereas sectors that contributed negatively include i) Commercial Banks (46 points) and ii) Cement (39 points). Scrip-wise positive contributors were TRG (280 points), PPL (65 points), ATRL (56 points), OGDC (47 points) and ANL (44 points) while negative contributors included HBL (52 points), POL (28 points) and ENGRO (24 points).
Foreign selling this week clocking-in at USD 0.1 million compared to a net buy of USD 3.0 million last week. Selling was witnessed in Technology & Communication (USD 2.1 million) and Power Gen. (USD 1.2 million).
On the domestic front, major buying was reported by Broker Proprietary (USD 3.7 million and Mutual Funds (USD 1.7 million). Average volumes arrived at 463 million shares (down by 4 percent WoW) while average value traded settled at USD 159 million (up by 10 percent WoW).
