KARACHI: After closing the week in red – with the benchmark KSE-100 Index shedding 898.1 points (-2.02 percent) – Pakistan Stock Exchange (PSX) is likely to remain under pressure in the week starting today (Monday) amid local political instability and geopolitical developments centring on Russia.
The market failed to keep momentum last week after gaining 567.2 points (+1.29 percent) in the preceding week due to tensions between Russia and Ukraine amid concerns over crude oil prices and supply chain disruption. However, the local political instability played a major role as Prime Minister Imran Khan is facing a vote of no-confidence and this situation is likely to weigh on the bourse throughout the week.
Moreover, a US lawmaker Scott Perry introduced a bill titled “Stopping Pakistani Terror Act” in the Congress last week that seeks to designate Pakistan as a state sponsor of terrorism. The bill tabled on March 8 read, “To provide for the designation of the Islamic Republic of Pakistan as a State Sponsor of Terrorism, and for other purposes.” The bill introduced in the House of Representatives has been referred to the committee on foreign affairs. The bill bears geopolitical implications and dented the investors’ confidence.
The benchmark KSE-100 Index shed 898.1 (-2.02 percent) to settle at 43,653.3 level. The KSE-30 Index shed 452.77 points (-2.6 percent) to close at 16,976.08 points. The KSE-100 Index is currently trading at a PER of 4.8x (2022) compared to the Asia-Pacific regional average of 13.2x while offering a dividend yield of 9.0% versus 2.4 percent offered by the region.
The sectors moving the index towards south were banks (-167 points), oil and gas exploration companies (-163 points), power generation and distribution (-143 points), cement (-113 points), and oil and gas marketing (-101 points). The major scrips depriving the index of points were HUBC (-124 points), LUCKY (-122 points), PPL (-75 points), OGDC (-60 points) and PSO (-59 points).
The sectors moving the index towards north were technology and cement (+107 points), automobile parts and accessories (+20 points), and chemical (+15 points). Scrip-wise positive contributors were SYS (+148 points), NATF (+23 points), and THALL (+20 points).
Foreign selling was witnessed this week, clocking in at $3.13 million against a net sell of $0.97 million recorded last week. Selling was witnessed in banks ($4.4 million), and textiles ($0.4 million). On the domestic front, major buying was reported by companies ($5.4 million), followed by other organisations ($3.7 million).
During the week under review, average volumes clocked in at 214 million shares (down by 0.7 percent on a week-on-week basis), while average value traded settled at $38 million (down by 11 percent on a week-on-week basis).
According to separate reports from brokerages including Arif Habib Limited and JS Research, the market is expected to remain range-bound in the upcoming week. The reports said that the market is expected to remain jittery due to the no-confidence vote. “On the international front, any de-escalation by Russia and successful negotiation with the West may push the commodity prices (especially oil and coal prices) down, which will improve the sentiment of the local bourse.”
