KARACHI: The stock market is likely to stay positive during the next week as the IMF and Pakistan expected to reach an agreement.
Analysts at Arif Habib Limited said that the market to remain positive in the upcoming week. With IMF and Pakistan expected to reach agreement soon, the investor sentiment is anticipated to remain buoyant.
Moreover, with the ongoing result season, certain sectors and scrips are expected to stay under limelight.
Keeping in view concerns over inflation and devaluation of Pak Rupee against greenback, investors are expected to have a cautious approach.
The KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.2x (2021) compared to Asia Pac regional average of 14.7x while offering a dividend yield of ~8.1 per cent versus ~2.2 per cent offered by the region.
The market commenced on a negative note this week given the uncertainty over outcome of Pakistan-IMF talks tagged with surge in petroleum prices raising concerns over inflation.
The market sentiment changed after Advisor to the PM informed that talks with IMF were moving in the positive direction, with staff-level agreement expected to be reached soon.
Alongside this, the current account deficit for September 2021 narrowed by 24.5 per cent MoM to USD 1.1 billion, fueling the positive momentum.
On the flip, continuous drop in PKR/USD parity to PKR 174 (all time high exchange rate), reduction in SBP reserves by 8 per cent WoW to USD 17.5 billion and FATF retaining Pakistan on grey-list in its plenary meeting, kept the index in check.
Albeit, the market closed at 45,578 points, gaining 757 points (up by 1.7 per cent) WoW.
Sector-wise positive contributions came from i) Commercial Banks (463 points), ii) Cement (184 points), iii) Oil & Gas Exploration Companies (137 points), iv) Fertilizer (107 points), and v) Insurance (42 points).
Whereas, sectors which contributed negatively were i) Technology & Communication (155 points), and ii) Food & Personal Care Products (31 points).
Scrip-wise positive contributors were HBL (187 points), UBL (150 points), ENGRO (99 points), LUCK (72 points) and MCB (64 points).
Meanwhile, scrip-wise negative contribution came from TRG (113 points), PSO (27 points) and SYS (26 points).
Foreign selling continued this week, clocking-in at USD 7.3 million compared to a net sell of USD 13.3 million last week. Major selling was witnessed in Fertilizer (USD 4.5 million) and Commercial Banks (USD 3.8 million). On the local front, buying was reported by Insurance Companies (USD 4.6 million) followed by Other Organizations (USD 2.5 million).
Average volumes clocked-in at 299 million shares (down by 13 per cent WoW) while average value traded settled at USD 64 million (down by 10 per cent WoW).