Stocks are forecast to remain mostly idle due to dangerously low foreign exchange reserves, a growing cash drought, and the rupee campaigning hard for early elections amid political deadlock between the government and opposition parties. Caution may prevail in view of the decline.
The benchmark KSE-100 shares index of the Pakistan Stock Exchange (PSX) closed at 42,150 points, down 452 points (-1.1%) week-on-week.
Analysts are looking at the market on the back foot next week as investors are going to assess the ground situation through a biased lens before making any moves as prices are still hot due to recent erratic trends.
Arif Habib Ltd, a brokerage, said in its weekly market report, “Equity markets are expected to remain range-bound in the coming week as market participants remain cautious due to political noise in the country.”
He said any positive news from Saudi Arabia and the International Monetary Fund (IMF)’s ninth review would benefit the market.
According to the brokerage, the KSE-100 is currently trading at a PER of 4.0x (2023) against the Asia-Pac regional average of 12.9x, while a P/E of ~10.2% against ~2.8% offered by the region. Offering profit.
The market was volatile in the outgoing week, even though Pakistan made a timely payment of its $1 billion international bond and Saudi Arabia extended its $3 billion deposit to the State Bank of Pakistan (SBP).
Markets remained under pressure due to uncertainty over the IMF deal and political noise. However, the market turned positive in the middle of the week as Russia agreed to sell oil to Pakistan at a discounted price, but this positive momentum was not sustained.
Additionally, SBP’s foreign exchange reserves data showed a decline of $784 million to a near four-year low of $6.72 billion.
With this, the rupee depreciated by Rs 0.71 or 0.32% week-on-week to Rs 224.4 against the greenback.
Sector-wise negative contributions came from cement (109 points), power generation and distribution (61 points), pharmaceuticals (60 points), technology and communication (57 points) and automobile assemblers (45 points).
While the sectors that lifted the index were Miscellaneous (131 points) and Automobile Parts & Accessories (3 points).
Among the losers were Habib Bank Ltd (55 points), System Ltd (54 points), Hub Power Company (50 points), Meezan Bank Ltd (43 points) and Millat Tractors Ltd (36 points).
Meanwhile, stocks supporting the market were Pakistan Services Limited (137 points), Bank Habib Limited (33 points), United Bank Limited (27 points), Bank Al Falah Limited (12 points), and Habib Metro Bank (12 points). Came. 11 points).
Foreign sales rose to $6.3 million compared to net purchases of $6.6 million last week.
Large sales were seen in commercial banks ($10.3 million), cement ($0.2 million), and all other sectors ($0.5 million).
On the local front, purchases were reported by individuals ($8.8 million), followed by insurance companies ($1.3 million).
Average volume rose to 180 million shares, up 11% week-on-week, while average trade value settled at $18 million, down 22% week-on-week.
