The local bourse witnessed a mixed trend during the week. The sentiment amongst investors remained suppressed amid concerns over the IMF Program, Budget FY20 and macro-economic challenges since Hafeez Shaikh took over as Finance Advisor to PM.
Moreover, reserves declined by 1.2% WoW. Albeit, the market was able to hold its ground amidst the ongoing result season which yielded several healthy results. The KSE-100 closed at 37,130 points, shedding 162 points (down by 0.43%) WoW.
KSE-100 closed at 37,130 points, shedding 162 points (down by 0.43%) WoW
Sector-wise negative contributions came from Pharmaceuticals (94 pts) as price hike by domestic manufacturers came under fire by the government, Oil & Gas Exploration Companies (64 pts), and Oil & Gas Marketing Companies (46 pts).
On the other hand, sectors that contributed positively include Commercial Banks (116 pts) given robust results in 1QCY19 despite imposition of higher taxes, Cement (44 pts) over expectation of recovery in cement prices, and Tobacco (8 pts).
Whereas, the scrips that remained under pressure include PPL (51 pts), FFC (30 pts), SEARL (29 pts), and PSO (27 pts).
On the flip-side, scrip-wise positive contributions came from UBL (75 pts), ENGRO (28 pts), DAWH (22 pts), and LUCK (21 pts).
Foreign buying was witnessed this week, clocking-in at USD 9.3mn compared to a net sell of USD 1.9mn last week.
Buying was witnessed in Commercial Banks (USD 5.3mn) and all other Sectors (USD 1.3mn).
On the domestic front, major selling was reported by Mutual Funds (USD 8.2mn) and Individuals (USD 3.7mn).
Volumes settled at 122mn shares (down by 30% WoW) while value traded clocked in at USD 33mn (down by 15% WoW).
Other major news, pharma industry and govt. agree on 75% hike in drug prices, government considers channeling cash resources to SBP from commercial banks, textile makers plan $1bn capacity expansion, and Indus Motor increases vehicle prices.
With PM Khan currently on a four day visit to China, several agreements are expected to be signed between both the countries.
While he met the World Bank CEO on the sidelines to discuss a potential financial assistance package, analysts expect other positive announcements upon his arrival as well. Keeping this in view, analysts see the market to be positive in the coming week.
analysts see the market to be positive in the coming week
The KSE-100 index is currently trading at a PER of 7.4x (2019) compared to Asia Pac regional average of 14.4x and while offering DY of ~7.8% versus ~2.5% offered by the region.