PSX weekly review: Lacklustre week drags KSE-100 downward

• Concerns over IMF programme, monetary policy announcement keep investors on sidelines.
• KSE-100 index declines 286 points to end the week at 41,344.01 points.
• Foreign buying was witnessed this week, clocking in at $1.63 million.

KARACHI: The Pakistan Stock Exchange (PSX) witnessed tepid trading in the outgoing week as delay in the revival of the International Monetary Fund (IMF) programme kept market participants mostly on the sidelines. Resultantly, the KSE-100 index declined 286 points or 0.7% to end the week at 41,344.01 points.

The market commenced the week on a negative note, amid concerns over the resumption of the IMF programme and the monetary policy announcement.

Moreover, the Pakistani rupee climbed up by Rs3.06 against the US dollar, closing the week at Rs207.91. In addition to this, the cement offtake reported a decline of 7.9% year-on-year during the fiscal year 2021-22.

Whereas, petrol and high-speed diesel sales during June 2022 witnessed a drop of 12% and 16% month-on-month, respectively. Meanwhile, the reduction in Arab Light price by 4% provided some respite to the investors and cushioned the overall dip.

Other major developments during the week were: SBP extended the deadline for implementing IFRS-9 to January 1, 2023, bank advances to the private sector swelled by 142%, Rs9.42 per unit tariff hike approved for K-Electric, and urea sales rose by a massive 73% month-on-month.

Meanwhile, foreign buying was witnessed this week, clocking in at $1.63 million against a net buy of $1.52 million recorded last week. Buying was witnessed in all other sectors ($0.63 million), and technology ($0.56 million).

On the local front, major selling was reported by mutual funds ($2.91 million), followed by banks ($2.20 million).

During the week under review, average volumes clocked in at 90 million shares (down by 55% week-on-week), while average value traded settled at $15 million (down by 52% week-on-week).

Major gainers and losers of the week

Sector-wise negative contributions came from cement (-97 points), and fertiliser (-57 points), commercial banks (-30 points), chemical (-27 points), and power generation and distribution (-24 points).

On the flip side, positive contributions came from technology and communications (+27 points), oil and gas marketing companies (+18 points), oil and gas exploration companies (+13 points), and close-end mutual funds (+4 points), and real estate investment trust (+3 points).

Scrip-wise major losers were Lucky Cement (-49 points), Engro Polymer and Chemical (-34 points), BAHL (-33 points), and Engro Corporation (-33 points).

Meanwhile, major gainers were Oil and Gas Development Company (+39 points), Pakistan Petroleum (+27 points), TRG Pakistan (+15 points), Sui Northern Gas Pipelines (+14 points), and HBL (+13 points).

Outlook for next week

A report from AHL stated that the market is expected to remain range-bound next week.

“Since next week will be a short one (due to Eid), with three working days along with lack of any major triggers, the market activity is expected to remain subdued,” it said, recommending investors to cherry-pick the scrips.

“The KSE-100 is currently trading at a PER of 4.2x (2022) compared to the Asia-Pacific regional average of 11.9x while offering a dividend yield of 9.3% versus 3.0% offered by the region,” the brokerage house stated.