Stocks to take impact from corporate results next week

The country’s premier capital market will revolve around corporate results in the following sessions; although soft inflation reading, last week, primarily whetted appetite for shares of cement and independent power producers (IPPs), said analysts.
An analyst at KASB Securities forecast the movement will draw strength from healthy results along with an upcoming inflow of $518 million from the International Monetary Fund (IMF).
Besides, oil and gas scrip performance hinges on fluctuation in international oil prices while, “we are confident on overweight cements and independent power producers and selectively positive about banks, fertilisers and refineries,” he added.
The Karachi Stock Exchange (KSE) 100-share Index gained overall 213 points, or 0.6 percent, week on week to end the last week at 34,656 points as against 34,443 points in the preceding week. Average daily volume rose by 9.9 percent to 328 million shares as compared to 298 million shares and value traded/day was 2.3 percent to $197 million.
However, foreign investors withdrew a total of $51.5 million during the week under review as there was a divestment of four percent, or 774.6 million shares, in K-Electric. A foreign portfolio investment of $3.3 million was recorded in the comparable period. January consumer price index inflation figure of 3.88 percent piqued interest in cement and IPPs.
However, despite cut in the financing rates under export financing scheme and long-term financing facility, investors were not attracted towards textile scrip, which, in fact, slid 0.5 percent week on week.
An analyst Raheel Ashraf at JS Research said together with low inflation notice, 150bps reduction in mark-up of national savings certificates and IMF’s nod to release of seventh tranche to Pakistan under the extended fund facility fuelled optimism in the market. Oil sector was the primary driver with the heavyweight OGDCL, PPL and POL cumulatively adding 184 points to the index.
Fauji Fertilizer that offers double digit yield garnered investor interest on reports of delay in gas cost hike, which would have marred earnings. FFC was up four percent during the last week. Banks remained laggard with UBL and MCB cumulatively dragging the index down by 143 points, with declining interest rates likely to weigh down banking numbers.
A cut by 47 to 53bps in cut-off yields of treasury bills and expectation regarding the upcoming textile policy affected stocks trading during the last week. Jahangir Siddiqui and Co, Avanceon Limited, Pakistan State Oil, Maple Leaf Cement and PICIC Growth Fund were the major gainers, while Century Paper Board, SNGPL, Bata (Pakistan) and Sui Southern Gas and Searle Pakistan were the major losers.