Having closed a choppy week a shade firmer, stocks may see bursts of bullishness in the coming days pinning bets on some better-than-buzz results from firms that have seen their businesses rebound in the post-Covid period, traders said.
The KSE-100 Shares Index, the main gauge of country’s capital market, closed at 46,079 points, up 170 points (+0.4 percent) week-on-week at Pakistan Stock Exchange (PSX).
Week-on-week, average trade volumes clocked in at 207 million shares, down 28 percent, while average traded value arrived at $46 million, down 16 percent.
“We expect the market to remain positive in the upcoming week. With the continuation of a strong result season, certain sectors and scrips are expected to stay under the limelight,” said an analyst report by Arif Habib Ltd, a brokerage house.
The brokerage said the market commenced the week on a positive note after International Monetary Fund’s (IMF) nod to $1 billion disbursements.
“However, the market corrected midweek as oil prices crossed $90/bbl for the first time since 2014. Also, budget deficit for the first six months of fiscal year 2021-22 touched Rs1.371 trillion to 2.1 percent of GDP (Gross Domestic Product),” the brokerage added.
Foreign selling clocked in at $5.9 million compared to a net sell of $4.4 million last week. Major offloading was witnessed in technology ($3.2 million) and all other sectors ($1.6 million). On the local front, buying was reported by other organisations ($11.1 million), followed by individuals ($ 3.1 million).
Sectors that helped the index gain momentum were fertilisers (159 points), automobile assembler (55 points), oil and gas exploration companies (40 points), commercial banks (38 points), and power generation and distribution (34 points). Stocks that gave the market a leg up were ENGRO (86 points), DAWH (61 points), MEBL (59 points), EPCL (34 points), and FFC (33 points).
Laggard sectors included technology and communication (-66 points), cement (-49 points), oil & gas marketing companies (-45 points), insurance (-36 points), and cable & electrical goods (-20 points).
Stocks weighed on the market were PSO (-39 points), AICL (-35 points), SYS (-33 points), MCB (-21 points), and PAEL (-20 points).
Muhammad Waqas Ghani at JS Research said the week had started on a dim note after six new IMF conditions surfaced in its detailed report on Pakistan.
However, the market shrugged it off and picked up momentum as companies posted robust financial results for the outgoing quarter along with good dividend payouts, Ghani said.
Furthermore, the government raised Rs509 billion through treasury bills' auction, slightly higher than the target of Rs500 billion, with an increase in yields compared to secondary market yields.
According to SBP data, foreign exchange reserves held by the central bank increased 10.2 percent week-on-week reaching $17.4 billion.
Analyst Nabeel Haroon at the Topline Securities said the current positivity could be attributed to good corporate announcements that came with higher than expected dividends.
During the outgoing week, the MSCI released an update on its Quarterly Index Review notifying no change in constituents for Pakistan in its main Frontier Market (FM) Index and also included the country in MSCI FM 100 and MSCI 15% Country Capped Index, which may generate some additional inflows.
Last week IMF projected Pakistan’s external debt may reach $138.568 billion in 2022-23; the government said it was looking for ways to reduce WHT (for Chinese IPPs), and DAP use declined by over 17 percent in Rabi season.