KARACHI: The stock market likely to remain range bound during next week due to political uncertainty with JUI-F to hold “Azadi March”.
Analysts at Arif Habib Limited said that on the economic front, narrowing current account deficit and improving foreign reserves serves as a good omen for overall confidence in the market. With the result season continuing next week, we expect activity to be influenced accordingly.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.8x (2020) compared to Asia Pac regional average of 13.3x and while offering DY of ~9.4 percent versus ~2.4 percent offered by the region.
The market commenced on a negative note with FATF warning to Pakistan echoing from last Friday. The negativity was cushioned as Pakistan steeply climbed the World Bank Ease of Doing Business Index from 136th to 108th. Further inversion in T Bill yields continued to improve sentiment.
However duress on the political front amid opposition preparing for a protest against the government dampened sentiment towards end of the week. The KSE-100 Index closed at 33,657 points, shedding 213 points (down by 0.6 percent) WoW.
Sector-wise negative contributions came from i) Commercial Banks (108 points), ii) Cement (104 points), and iii) Power Generation & Distribution (76 points) while positive contributions were led by i) Oil & Gas Exploration Companies (118 points), ii) Food & Personal Care Products (47 points) and iii) Fertilizer (30 points). Scrip-wise negative contributions were led by LUCK (58 points), BAHL (44 points), HUBC (42 points), PSEL (35 points) and HBL (35 points).
Foreign buying was witnessed this week clocking-in at USD 2.8 million compared to a net sell of USD 2.1 million last week. Buying was witnessed in Cement (USD 2.0 million) and Fertilizer (USD 1.2 million). On the domestic front, major selling was reported by Individuals (USD 3.1 million) and Companies (USD 2.2 million).
Average Volumes settled at 125 million shares (down by 11 percent WoW) while average value traded clocked-in at USD 25 million (down by 17 percent WoW).
