Weekly Review: stocks to stay positive on IMF meeting

Weekly Review: stocks to stay positive on IMF meeting

KARACHI: The stocks may stay positive during next week owing to a number of factors including scheduled meeting of IMF, coronavirus vaccine target and expected healthy corporate earnings.

Analysts at Arif Habib Limited said that the market to show positivity in the upcoming week attributable to successfully achieving vaccination targets, meeting with IMF scheduled on January 12, 2022 in which completion of review would result in disbursement of SDR 750 million ($1,059 million) and expectation of healthy corporate profitability during the outgoing quarter particularly across cyclical sectors should keep sentiments positive.

READ MORE: IMF Board to approve $1.059bn by Jan 12, 2022: Tarin

However, rising cases of Covid-19 (fifth wave of coronavirus) and current macro-economic concerns like rising imports, and higher inflationary reading due to increasing prices of commodities could keep the market range-bound

The benchmark KSE-100 Index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 5.1x (2022) compared to Asia Pac regional average of 14.0x while offering a dividend yield of ~8.7 per cent versus ~2.3 per cent offered by the region.

READ MORE: Stocks up 263 points amid optimism on IMF decision

The KSE-100 Index started the New Year with renewed optimism, led by heavy foreign buying in technology scrips (foreign buying in technology sector during the week were $22.5 million).

Moreover, decline in trade deficit on MoM basis, appreciation of PKR against the dollar, and expectations of fresh funds allocation by foreigners in PSX improved investors sentiments. The domestic equity bourse closed at 45,346 points (+750 points WoW or 1.68 per cent).

READ MORE: Dollar falls by 25 paisas to Rs176.67 in interbank

Contribution to the upside was led by i) Fertilizer (212 points), ii) Power Generation (159 points), iii) Commercial Banks (146 points), iv) Oil and Gas Exploration (111 points), and v) Engineering (41 points). Scrip-wise major gainers were HUBC (163 points), SYS (94 points), POL (85 points), EFERT (76 points), and FFC (59 points).

Foreigners bought stocks worth of $ 24.2 million compared to a net buy of $ 8.1 million last week. Major buying was witnessed in Technology ($ 22.5 million) and Banks ($ 0.7 million). On the local front, selling was reported by Individuals ($ 15.1 million) followed by Mutual Fund ($ 8.4 million). The average daily volumes for the outgoing week were up by 46 per cent to 318 million shares, and traded value also up by 32 per cent to $ 57 million, respectively.

READ MORE: SBP continues banking relaxations amid rising COVID cases

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