KARACHI: The stock market likely to trade in green during the next week owing to a clarity has emerged on the political front.
Analysts at Arif Habib Limited said that the stock market to show strong signs of a comeback in the upcoming week.
Moreover, it is likely that the rollover of Chinese loans worth $2.3 billion is on cards, which will conserve the falling reserves.
Furthermore, dip in international oil prices amid demand slowdown from China and emergency crude stockpile releases by International Energy Agency is likely to shift the bourse to the green zone.
The benchmark KSE-100 is currently trading at a PER of 4.7x (2022) compared to Asia Pacific regional average of 11.5x while offering a dividend yield of 8.8 per cent versus 2.7 per cent offered by the region.
In the outgoing week the market opened to a blood bath session, shedding 1,250 points on the back of surprising dismissal of no confidence motion by the National Assembly deputy speaker followed by dissolution of the National Assembly.
Moreover, rupee depreciated to its all-time low of 188/USD amid sliding foreign exchange reserves and the ongoing political uncertainty.
This necessitated a massive policy rate hike (+250bps) to 12.25 per cent by the State Bank of Pakistan (SBP) in an emergency Monetary Policy Committee (MPC) meeting.
Albeit, the bourse welcomed a steep revival of investor’s confidence, given the clarity obtained through Supreme Court’s much awaited judgment rejecting the speakers’ dismissal of the vote, together with decreasing oil prices further adding to the gains. The bourse closed at 44,445 points, (down by 1.56 per cent) WoW.
Sector-wise negative contributions came from i) Cement (314 points), ii) Oil & Gas Exploration (89 points), iii) Power Generation & Distribution (80 points), iv) Engineering (65 points), and v) Food & Personal Care Products (60 points).
Whereas, sectors which contributed positively were i) Chemicals (70 points), ii) Fertilizer (63 points), iii) Cable & Electrical Goods (5 points), iv) Inv. Banks/Inv. Cos./Securities Cos. (4 points), and v) Real Estate Investment Trust (2 points). Scrip-wise negative contributors were LUCK (145 points), HUBC (60 points), TRG (48 points), DGKC (46 points) and OGDC (45 points). Meanwhile, scrip-wise positive contribution came from EPCL (55 points), SYS (26 points), EFERT (24 points), MEBL (22 points), and MCB (19 points).
Foreign selling continued this week, clocking-in at USD 3.78 million compared to a net sell of USD 15.55 million last week. Major selling was witnessed in Commercial Banks (USD 3.8 million) and Cement (USD 1.4 million). On the local front, buying was reported by Individuals (USD 14.8 million) followed by Banks/DFI’s (USD 4.7 million).
Average volumes clocked-in at 153 million shares (down by 51 per cent WoW) while average value traded settled at USD 26 million (down by 42 per cent WoW).