Weekly Review: Pakistan Stocks Likely to Move in Green Zone

Sun Oct 09 2022
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KARACHI: Pakistan Stocks are expected to trade in the green zone for the following week, beginning October 10, 2022.

According to analysts, the market is predicted to continue bullish in the next week. The market anticipates a status quo at the Monetary Policy Committee (MPC) meeting on Monday, October 10, 2022. While signs of a sustained parity will also help the index’s attitude.

The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) is now trading at a PER of 4.2x (2023) compared to the average for the Asia Pacific region of 12.1x and offers a dividend yield of 9.8% vs the area’s 2.9%. The market rose over the previous week as China agreed to refinance a $2.24 billion loan and the government is in discussions to roll over $ 2 billion in SAFE China deposits. Additionally, the trade deficit decreased 21.4% YoY from $11.72 billion to $9.2 billion, which helped the index maintain momentum throughout the week.

Additionally, the Pakistani Rupee (PKR) strengthened versus the US dollar, finishing at 219.92 (up 8.53 PKR | 3.7% WoW). Additionally, the Asian Development Bank (ADB) declared it will contribute between $2.3 billion and $2.5 billion to the relief effort following the recent natural catastrophe. To keep the market in control, Moody’s reduced Pakistan’s sovereign credit rating on Thursday from B3 to Caa1. This was done in response to increasing liquidity and external vulnerability threats. Despite this, the market gained 956 points and finished at 42,085 points (up by 2.3 per cent).

Sector-wise positive contributions came from Technology & Communication (360 points), Power Generation & Distribution (251 points), Cement (129 points), Fertilizer (115 points) and Chemical (44 points). Whereas, sectors which contributed negatively were Miscellaneous (44 points), and Paper & Board (6 points). Scrip-wise positive contributors were HUBC (227 points), TRG (171 points), SYS (170 points), ENGRO (66 points) and EFERT (61 points). Meanwhile, scrip-wise negative contribution came from PPL (48 points), PSEL (41 points), MCB (26 points), UBL (24 points) and FATIMA (11 points).

Foreigners buying continued during this week, clocking in at $ 4.7 million compared to a net buy of $ 0.15 million last week. Major buying was witnessed in Technology ($ 6.0 million), Power ($ 0.4 million) and Cement ($ 0.3 million). On the local front, selling was reported by Insurance ($ 5.7 million) followed by Banks/DFI’s ($ 4.4 million). Average volumes clocked in at 434 million shares (up by 118 per cent WoW) while average value traded settled at $ 48 million (up by 32 per cent WoW).

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