PSX weekly review: Bulls maintain control as KSE-100 rises 0.4%

• Multiple international, local developments help benchmark index post 170 points gain.
• Trading during the week remained volatile.
• Market participants reacted to positive and negative developments.

KARACHI: Despite certain economic headwinds, bulls maintained control at the Pakistan Stock Exchange (PSX) in the outgoing week as multiple international and local developments led the KSE-100 index to inch up 0.4%, or 170 points, to settle at 46,079.37.

Trading during the week remained volatile as market participants reacted to positive and negative developments.

The week started on a dim note as six new conditions by the International Monetary Fund (IMF) surfaced in its detailed report on Pakistan. 

However, the market shrugged it off and picked up momentum as companies posted better financial results for the outgoing quarter along with good dividend payouts. 

During the week, the Morgan Stanley Capital International (MSCI) released updates on its quarterly index review notifying no change in constituents in Pakistan in MSCI Frontier Market Index (FM) and also included Pakistan in MSCI FM 100 and MSCI 15% country capped index, which may generate some additional inflows.

Other major developments during the week were: the IMF said Pakistan’s external debt to reach $138.568 billion in 2022-23, the government seeks a way to reduce WTH for Chinese IPPs, payment to power plants, DAP use declines by over 17% in Rabi season, low-cost housing scheme to be introduced, and Chinese investors demanded more incentives, still a strategic partner, the US reaffirmed.

Meanwhile, foreign selling was witnessed this week, clocking in at $5.9 million against a net sell of $4.4 million recorded last week. Selling was witnessed in technology ($3.2 million), and all other sectors ($1.6 million).

On the domestic front, major buying was reported by other organisations ($11.1 million), followed by individuals ($3.1 million).

During the week under review, average volumes clocked in at 207 million shares (down by 28% week-on-week), while average value traded settled at $46 million (down by 16% week-on-week).

Major gainers and losers of week

Sector-wise positive contributions came from fertilisers (+159 points), auto assembler (+55 points), oil and gas exploration companies (+40 points), commercial banks (+38 points), and power generation and distribution (+34 points). 

On the flip side, negative contributions came from technology and communication (-66 points), cement (-49 points), automobile assemblers (-4 points), oil and gas marketing companies (-45 points, insurance (-36 points), and cable and electrical goods (-20 points)

Scrip-wise major gainers were Engro Fertiliser (+86 points), Dawodd Hercules (+61 points), Meezan Bank (+59 points), Engro Polymer and Chemical (+34 points) and Fauji Fertiliser Company (+33 points). 

Meanwhile, scrip-wise major losers were Pakistan State Oil (-39 points), Adamjee Insurance Company (-35 points), Systems Limited (-33 points) and MCB (-21 points) and Pak Elektron (-20 points).

Outlook for next week

A report from Arif Habib Limited predicted: “We expect the market to remain positive in the upcoming week. 

Moreover, it said with the continuation of a strong result season, certain sectors and scrips are expected to stay under limelight.

“The KSE-100 is currently trading at a PER of 5.1x (2022) compared to the Asia-Pacific regional average of 13.9x while offering a dividend yield of 8.5% versus 2.3% offered by the region,” the brokerage house stated.