Sunday, September 25, 2022

Weekly market review: KSE-100 sheds 1008 points, volumes likely to dry out amid Ramadan, budget


Zain Zubair
Zain Zubair is a staff writer for World News Observer. He is studying ACCA in Pakistan. Besides Accountancy and writing pieces, he loves cooking and nature photography. Zain has attended various modern journalism workshops. Contact: [email protected]

While the outgoing quarter remained positively surprising with sectors such as Commercial Banks, Cements, and Chemicals unveiling above street consensus result outcomes, investors continued to remain wary owing to persisting economic despondency.

This has contributed to ambiguity over future corporate earnings growth, and coupled with a lack of clarity over the finalization of the IMF program, the KSE-100 index has continued to remain under pressure.

This week the bourse ended at 36,123pts, shedding 1,008 points (down by 2.7%) WoW.

Negative sector-wise contributions came from Oil & Gas Exploration Companies (308 pts) amid fall in international oil prices, Commercial Banks (171 pts), Fertilizers (148 pts), Power Generation & Distribution (89 pts) and Oil & Gas Marketing Companies (70 pts).

On the flip side, sectors that contributed positively include Tobacco (27 pts) and Insurance (5 pts).

Scrip-wise negative contribution came from PPL (125 pts), OGDC (90 pts), POL (78 pts) and HBL (73 pts).

Whereas, positive scrip-wise contributions came from PSMC (24 pts), PMPK (20 pts), HMB (12 pts) and PAKT (7 pts).

Foreign buying continued this week clocking-in at USD 4.8mn compared to a net buy of USD 9.3mn last week.

Buying was witnessed in Cements (USD 3.9mn) and Commercial Banks (USD 2.0mn).

On the domestic front, major selling was reported by Mutual Funds (USD 13.4mn) and Broker Proprietary Trading (USD 0.6mn).

Volumes settled at 105mn shares (down by 14% WoW) while value traded clocked in at USD 29mn (down by 13% WoW).

Other major news Cabinet committees dealing with economic matters reconstituted, FTA Phase-II signed with China, Rs14.38 per litre increase in petrol price recommended by Ogra,  Talks on $8 billion bailout: Government, IMF in final round,  CPI-based inflation recorded at 8.8 percent in April on YoY basis, and Foreign exchange: SBP reserves dip 2.4% to stand at $8.8b.

Market Outlook

Volumes usually dry out in the month of Ramzan given shorter trading hours. Albeit, with budgetary proposals following in, analysts believe certain sectors / scrips may come under limelight.

Whereas, staff level agreement of the IMF program is expected to restore confidence of the market.

The KSE-100 index is currently trading at a PER of 7.2x (2019) compared to Asia Pac regional average of 14.4x and while offering DY of ~8.1% versus ~2.5% offered by the region.


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