Earnings likely to lure back investors next week

Pakistan stocks may endure further slippages on oil fall, but exciting earning stories would lend a support and offset the negative impact, dealers said on Saturday.

 “The crude oil price is yet to bottom out...the supply gluts and Fed’s hints to raise interest rate in March would keep mounting pressure on the world commodities,” said Faisal Shahji, head of sales at Standard Capital Securities.

Oil stocks are the market movers as they hold highest weight in the index. A little downward movement in the oil stocks may prevail on the sentiments, said Shahji.

With a slight decline of 0.2 percent during the last week, the Pakistan Stock Exchange’s (PSX) benchmark 100-share Index stood at 30,949.03 points on Friday.

Average daily volume increased 12 percent to 147.5 million shares and average daily value rose 10 percent to Rs8 billion ($76.3 million).

The PSX 100-share Index will continue to take cue from the US crude price movement. “Local investors will also closely monitor Chinese bourse,” he said.

Besides, the settlement of futures counter or roll-over of positions to February futures from January may wield selling pressure in the next week.

Investors will also be affected by the decision of foreign traders, who sold stocks (in net) worth $31.7 million during the last week.

However, investors will bet on earning stories and take positions in fundamentally strong and speculative stocks at higher prices. “Sui Southern Gas Company may continue to enjoy the buying spree after it announced new date for its board meeting on January 29 to approve profit/loss account,” he said. It will report its financials after three years.

Pakistan Oilfields Limited, Fauji Fertilizer Company, Fauji Fertilizer Bin Qasim, Pakistan Refinery Limited, Hinopak Motors Limited, Engro Foods, Bank Al Habib, and Attock Cement will also announce their results during the next week.

Besides, the reports related to the Pakistan International Airlines and the China-Pakistan Economic Corridor will continue to provide a little strength to the market. There will also e on select buying in the stocks, including cement and steel sectors, he said.

A KASB Securities report said the upcoming International Monetary Fund and government meeting, monetary policy announcement and results of the big tickets will set the market’s direction.

However, Arif Habib Limited said monetary policy statement will remain a non-event for the market. Banks may exhibit a relief rally given that foreigners do not sell on strength coupled with exciting quarterly results anticipated. In the near term, the market is expected to remain upwards amid global slowdown concerns.

“Cements, refineries and banking financial results may beat the expectation and restore investors’ confidence," it added. “We reiterate that investors should prioritise fundamentals.”