The Pakistan Stock Exchange (PSX) ended a volatile week in green after four weeks as clarity on talks with the International Monetary Fund (IMF) officials and rising international oil prices helped the benchmark KSE-100 index gain 344 points, or 0.8 per cent, during the outgoing week to settle at 44,821.53 points.
As per a local media report that spoke with financial analysts, the market was driven largely by the news flow relating to the IMF’s review regarding the $6 billion loan programme.
The Pakistani rupee depreciated rupee dropped to an all-time low of Rs171.20 against the US dollar during the week while investor expectations about weak quarterly financial results also left a negative impact on trading activity at the bourse.
The trend reversed towards the end of the week after Shaukat Tarin assured the nation that the government would resume the IMF’s Extended Fund Facility, as well as Prime Minister Imran Khan’s statement allaying any rumours of a military-political divide strengthened investors’ sentiment.
Moreover, a jump in international crude oil prices — which touched a fresh three-year high, climbing above $85 a barrel on forecasts of a supply deficit — also fuelled bullish trading at the local bourse and investors took a cue from the rise and made fresh investments in oil stocks, which lent support to the benchmark KSE-100 index.
During the week under review, average volumes clocked in at 342 million shares (up by 29% week-on-week), meanwhile average value traded settled at $71 million (up by 20% week-on-week).
Sector-wise positive contributions came from commercial banks (+393 points), oil and gas exploration companies (+136 points), fertiliser (+123 points), cement (+98 points), and pharmaceutical (+28 points), whereas negative contributions came from technology and communication (-342 points), and food and personal care products (-50 points).
Scrip-wise major gainers were HBL (+153 points), Pakistan Petroleum (+87 points), UBL (+67 points), Lucky Cement (+59 points) and Oil and Gas Development Company (+42 points). On the flip side, major losers were TRG Pakistan (-260 points), Systems Limited (-70 points) and Pakistan Tobacco Company (-27 points).
A report from Arif Habib Limited said, “As we get closer to resuming the IMF programme and receiving a $1 billion tranche, we expect the market to perform well in-tandem.”
“Whereas recent bouts of selling at the index has once again opened up valuations, we advise investors to cherry-pick blue-chip stocks with a long term focus,” it said, adding, however, key short term risks include regional volatility and the ensuing security concerns, together with rupee depreciation.
“The KSE-100 is currently trading at a PER of 5.2x (2021) compared to Asia-Pacific regional average of 14.7x while offering a dividend yield of 8.1% versus 2.2% offered by the region,” the brokerage house stated.