- Market adopted a positive momentum once uncertainties related to mini-budget gradually began to dispel.
- KSE-100 gains 1.1%, pushing up KSE-100 index to 44,596.07 points.
- “We expect the bourse to remain in the green zone amid clarity on the IMF front,” AHL says.
KARACHI: The Pakistan Stock Exchange (PSX) remained highly volatile and ended the last week of 2021 on a positive note, and remained in the green in four out of five trading sessions. As a result, it gained 1.1% or 179.87 points, pushing up the benchmark KSE-100 index to 44,596.07 points.
According to a report released by the Arif Habib Limited (AHL), the benchmark KSE-100 index recorded losses earlier during the week owing to lack of clarity on implications of supplementary finance bill — mini-budget — and looming concerns of Omicron variant across major cities of Pakistan.
“However, the market adopted a positive momentum for the remaining week once uncertainties related to the mini-budget gradually began to dispel after it was tabled in a cabinet,” it said.
The week neared its end with investor sentiments further strengthening after the supplementary finance bill received cabinet’s approval, as it was the last hurdle remaining in the way of $1 billion tranche disbursement from the International Monetary Fund (IMF), the review of which is scheduled on January 12, 2022.
Other major developments during the week were: the government decided to substitute power, RLNG tariffs for textile industry, $300 million received from Asian Development Bank (ADB) for energy sector reforms, National Refinery shuts down operations as furnace oil stocks pile up, Realme plans expansion in Pakistan and petrol demand hits record 8.35 million tons in FY21, and Pakistan Refinery to undertake expansion.
Meanwhile, foreign buying was witnessed this week, clocking in at $8.1 million against a net sell of $3.7 million recorded last week. Buying was witnessed in technology ($4.8 million), and all other sectors ($2.5 million).
On the domestic front, major selling was reported by banks/DFIs ($2.5 million), followed by individuals ($2 million).
During the week under review, average volumes clocked in at 218 million shares (up by 1.2% week-on-week), while average value traded settled at $84 million (up by 13% week-on-week).
Major gainers and losers of the week
Sector-wise positive contributions came from cement (+112 points), fertiliser (+75 points), commercial banks (+72 points), tobacco (+32 points), and oil and gas marketing companies(+32 points). On the flip side, negative contributions came from power generation (-18 points) and investment banks (-7 points).
Scrip-wise major gainers were MCB (+45 points), Pakistan Oilfields (+34 points), Engro Corporation (+33 points), DG Khan Cement (+33 points) and Pakistan Tobacco Company (+32 points). Meanwhile, major losers were Hubco (-39 points), HMB (-18 points) and Abbott Laboratories (-17 points).
Outlook for next week
A report from AHL predicted: “We expect the bourse to remain in the green zone amid clarity on the IMF front. Moreover, we expect foreign inflows in the upcoming month amid the “January effect.”
“Overall optimism concerning upcoming corporate result season and scrips currently being traded at attractive valuations is further expected to boost positive sentiment in the bourse,” it said.
“The KSE-100 is currently trading at a PER of 5.0x (2022) compared to the Asia-Pacific regional average of 15.0x while offering a dividend yield of 8.9% versus 2.2% offered by the region,” the brokerage house stated.