Pakistan Stock Market climate appeared gloomy during the week with investors cautiously navigated through murky waters. As economic headwinds continue to subdue overall growth, market participants have hopes attached to a potential agreement with the IMF to bring the economy back to the right track and improve sentiment.
During the week, the benchmark index lost 643 points (-1.7% WoW) to settle at 38,306 points.
Sector-wise negative contributions came from Commercial Banks (149pts), Cement (120pts), Oil and Gas Exploration Companies (109pts), Oil and Gas Marketing Companies (76pts), and Power Generation & Distribution Companies (53pts).
Whereas, sectors that contributed positively include Tobacco (48pts), and Textile Composite (7pts). Scrip-wise major laggards were LUCK (68pts), MCB (50pts), POL (49pts), HBL (48pts) and OGDC (39pts).
Analysta at Arif Habib Limited said that the foreign selling continued during the week clocking-in at USD 15.6mn compared to a net sell of USD 3.5mn last week.
Foreign selling was witnessed in Exploration & Production (USD 13.4mn) and Cement (USD 1.5mn). On the domestic front, major buying was reported by Insurance (USD 8.3mn) and Companies (USD 3.6mn). Volumes during the week settled at 93mn shares (down by 18% WoW) whereas value traded arrived at USD 27mn (down by 21% WoW).
Other major news: Overseas Pakistanis remit USD 14.35bn in 8MFY19, Trade deficit narrows 11% to USD 21.5bn in Jul-Feb’19, Foreign reserves increase to USD 14.965bn, LSM growth falls by 2.3% in 7 months, Largest hosiery producer goes public, and PSDP for FY2019-20 likely to stay unchanged at PKR 675bn.
Key near term events include visit of the Malaysian Premier on Pakistan Day (23rd Mar’19) as well as the State Bank of Pakistan’s Monetary Policy this month. On the stock market front, the bourse likely to remain range bound next week due to delay in the IMF agreement and suggest market participants to invest in blue chip scrips on dips. The KSE-100 index is currently trading at a PER of 7.5x (2019) compared to Asia Pac regional average of 12.5x and while offering DY of ~7.6% versus ~2.70% offered by the region.