KARACHI: The stock market likely to witness mixed trading activities during next week owing to grey list status of Pakistan and budget incentives.
Analysts at Arif Habib Limited said that the market to depict a mixed to positive trend in the upcoming week attributable to: FATF’s announcement to keep Pakistan on Grey List; and sectors that got major relief in the budget will remain in the limelight.
On the other hand, E&P scrips are expected to continue performing well due to higher international oil prices and government shelving divestment plan of OGDC and PPL and also deferring divestment of government shares in MARI.
However, a Current Account Deficit of USD 632 million for May’21 and uptick in CPI in the upcoming months, may dampen investors sentiments.
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 16.5x while offering a dividend yield of ~6.9 per cent versus ~2.3 per cent offered by the region.
This week trading commenced on a negative note with the index shedding 226 points on Monday amid economic uncertainty given surge in international oil price along with deprecation of the rupee might which is expected to push up inflationary readings in upcoming months.
Pessimism at the bourse was further fueled by i) Unavailability of gas to non-export related industries, ii) Petrol shortage at many fuel stations in Pakistan as oil tankers go on a countrywide strike which might affect business of exporters, iii) proposal for reclassification of Pakistan from MSCI Emerging Market to Frontier Market, and iv) Uncertainty over the FATF plenary outcome led to profit taking by investors. The KSE-100 index closed at 47,603 points, down by 635 points or 1.32 per cent WoW.
Contribution to the downside was led by i) Cements (212 points), ii) Commercial Banks (178 points), iii) Oil and Gas Exploration Companies (58 points), iv) Pharmaceuticals (53 points), and v) Oil and Gas Marketing Companies (51 points). Scrip-wise major losers were LUCK (118 points), TRG (62 points), MCB (60 points), PSO (45 points), and HBL (44 points). Whereas, scrip-wise major gainers were SYS (67 points), FCEPL (43 points), HUBC (38 points), ANL (34 points) and MTL (21 points).
Foreigners offloaded stocks worth of USD 7.88 million compared to a net sell of USD 6.76 million last week. Major selling was witnessed in All other sectors (USD 7.42 million) and Commercial Banks (USD 1.94 million). On the local front, buying was reported by Individuals (USD 13.71 million) followed by Banks (USD 12.86 million). That said, average daily volumes and traded value for the outgoing week were down by 34 per cent and 35 per cent to 694 million shares and USD 112 million, respectively.
