Karachi stocks may endure dull trade;policy rate to guide move

Karachi stock market is expected to have lacklustre trading sessions next week after the eventful season of financial earnings came to an end on Friday, said dealers on Saturday.
“With a bagful of company results already announced this week, next week will lack those triggers,” said a report by KASB Securities.
However, “The ongoing meetings between the International Monetary Fund and Pakistan for the ninth review under the extended fund facility are expected to conclude smoothly later next week and should induce positive sentiments,” said the report.
In the week ended on Friday, the benchmark KSE 100-share Index increased 316.29 points, or 0.93 percent week on week, to 34,261.61 points.
Average daily volumes improved around two percent to 165 million shares, and traded value surged 13 percent to Rs9.3 billion ($88.1 million) during the last week.
Foreigners were net sellers in the last week with selling of $20.1 million, taking their net selling for the month to $48.2 million.
Major foreign selling was in banking sector ($10.34 million) followed by textiles ($3.43 million) and cements ($2.33 million).
The market is expecting a hike in interest rate by the US Federal Reserve.
Another report said oil prices and global markets performance will keenly be tracked.
A report by Arif Habib Limited said views will possibly be generated on the upcoming monetary policy due in mid-November, while auction of Pakistan Investment Bonds the next midweek will also set the tone.
A securities analyst said the index may drop 400 to 500 points in the days to come under the lead of foreign investors, as depreciation in rupee in parity with the dollar has reduced their share values in dollar denominations.
Last week, key concerns were lack of progress on circular debt and fiscal stress.
The index traded sideways in the first two trading sessions but rallied in the last three trading sessions on the back of better than expected cements, pharmaceuticals, banking, and fertiliser sectors’ quarter results. Nonetheless, most of the activity was concentrated in cements, banking, pharmaceuticals and fertiliser stocks.
Major buyers were local mutual funds ($13.9 million), non-banking financial companies ($5.6 million) and other local companies ($5.1 million), said Topline Securities in a report.
Real estate investment, automobile and parts, tobacco, forestry and beverages increased 11.3 percent, 7.3 percent, 6.6 percent, 5.8 percent and 4.5 percent, respectively.
Media, electronic and electrical goods, and food producers decreased 7.4 percent, 4.2 percent and three percent, respectively, it said. An analyst at Arif Habib Limited said renewed interest was seen across the board amid the results season despite futures roll-over. “Announcements of major results like PSO, PEL, GLAXO, FCCL, LUCK, ENGRO, INDU, PSMC, EFERT, HUBC, and UBL spurred market activity,” he said.
”Most results were in accordance with expectations; PSO, INDU and PSMC surpassed consensus estimates.”