Healthy financial results may keep PSX in green next week

After the benchmark index of the Pakistan Stock Exchange (PSX) lost 1,097 points during the outgoing week, market gurus expect the bourse to turn green on the basis of expected healthy financial results to be announced in the upcoming week.

Some of big giants in cement, banking and oil & gas sectors are set to announce financial results in the coming week, including Fauji Cement, DG Khan Cement, Kohat Cement, Power Cement, Habib Bank, Askari Bank, Meezan Bank, Soneri Bank, Allied Bank, Faysal Bank, Bank Of Punjab, Pakistan State Oil and Mari Petroleum.

Likewise, other major companies announcing results in the next week include Kot Addu Power Company, Millat Tractors Limited, Engro Fertilizers Limited, Engro Corporation Limited, Al-Shaheer Corporation Limited, Sitara Chemical Industries Limited, Gatron Industries Limited, Mughal Iron and Steel Industries, National Foods Limited, and Tariq Glass Industries Limited.

Analysts at Arif Habib Limited said that the market will turn positive in the coming week given healthy earnings expectations in the ongoing result season. 

The benchmark KSE-100 Index is currently trading at a PER of 7.4x (2021) compared to Asia Pacific regional average of 17.7x, while offering DY of 6.5pc versus 2.5pc offered by the region.

The market remained in the negative zone throughout the outgoing week as investors resorted to profit taking. Despite finalization of agreement between IPPs and the government, sentiment in the power sector remained lacklustre.

As international oil prices crossed $60/bbl mid-week, brief interest was witnessed in the E&P sector.

Albeit this was short-lived as oil prices corrected slightly by week end, and market participants were sidelined from the E&P stocks.

Pertinently, the market in the outgoing week witnessed its highest ever single day volume of 1,125 million shares. With that said, the market closed red on all five days, closing at 45,808 points, down by 1,098 points / 2.4pc on a week-on-week (WoW) basis.

Sector-wise, negative contributions came from commercial banks (448 points), fertilizer (267 points), oil & gas exploration companies (175 points) and power generation & distribution (113 points). On the other hand, cements (318 points), technology & communication (16 points) and refinery (16 points) contributed positively.

Among the scrips, negative contributors included UBL (105 points), HBL (100 points), and ENGRO (99 points), while positive contributors included LUCK (144 points), DGKC (63 points), and KOHC (36 points).

Foreign selling continued this week, clocking in at $3.2 million compared to a net sale of $2.7 million last week. Selling was witnessed in commercial banks ($4.3 million) and E&P ($0.4 million). On the domestic front, major buying was reported by individuals ($12.7 million) and companies ($8.4 million).

Average volumes arrived at 734 million shares (up by 32pc WoW), while average value traded settled at $169 million (down by 1.5pc WoW).