ISLAMABAD: The Pakistan Stock Exchange to score more gains in the coming week as all analysts were of the opinion that the government has met all the conditions and it would be a smooth sailing and the country will get $700 million to help shore up reserves and further strengthen domestic currency.
KSE100 index strengthened by 1,261 pts or 2.7% to cloe at 47,494 pts, the upswing was fueled by domestic currency appreciation against dollar by Rs 5.05 or 1.8 percent closing at PKR282.7/USD, a decrease in international oil and coal prices, a decrease in local petrol/HSD prices.
Moreover, a decrease in treasury-bill cut-off rate, Pakistan’s trade deficit improving by 31.15% on month on month basis in September, the disbursement of Rs 62.75 billion to IPPs and IT industries allowed free use of 50% dollar revenue had a positive impact on the market.
Foreigner selling was witnessed during this week, clocking in at $12.05 million compared to a net buy of $0.19 million last week. Major selling was witnessed in Commercial Banks ($8.86 million) and other sectors ($ 2.61 million).
On the local front, buying was reported by Banks / DFIs ($13.61 million) followed by Companies ($2.1 million). Average volumes arrived at 291 million shares (up by 44% on week on week basis) while the average value traded settled at $26 million (up by 15% week on week basis).
Sheheryar Butt Portfolio Manager at Darson Securities said outlook for the upcoming week appears to be positive on back of continuous appreciation of domestic currency where on an average rupee has recovered by Re 1 per day.
The government’s stance to crack down the hundi and hawla system and imposing a ban on goods movement under ATT would help strengthen the economy and generate revenue collection and support local industry.
The strengthening of the rupee bodes well for the economy and will provide much needed cushion to the government to cut the petroleum product prices.
He said initial estimates showed the price of petrol and diesel to see a fall of Rs 30 to Rs 20 respectively.
Sheheryar said that weekly inflation showed an upward spiral but cut in petroleum product prices to help cool down the inflation going forward as global crude oil also saw downward correction.
Overall activity to remain strong in upcoming sessions as the index during the outgoing week scored a gain of 1200 points as fundamentals are quite strong with sectors started to perform well like cement and auto sectors with marginal improvement witnessed in exports whereas trade deficit has been controlled.
Positive news he said was the four years extension in the GSP status by the EU which would generate more demand and exports to the region might pick up.
“Looking ahead, the market’s performance is anticipated to be significantly influenced by the upcoming IMF review scheduled for November”, said an analyst from the AKD Securities.
Regarding the political landscape, while the expected timeline for elections is given, providing exact dates for the elections would be a positive development.
Additionally, upcoming inflation readings and current account data would remain in the limelight. Overall, we continue to advise our investors to remain cautious while investing and consider companies with strong fundamentals and high dividend-yielding companies, the analyst said.
“We expect the market to retain the positive momentum in the coming week as the financial results start pouring in from next week”, said Tahir Abbas, head of research at Arif Habib Ltd.. certain scrips are expected to be in the limelight. Keeping in view the IMF’s persistent call for gas price adjustments to address the circular debt issue, the caretaker government is expected to implement gas price hike
