KARACHI – Pakistani Rupee and Stock Exchange to bounce back further in theopen market.
The market commenced on a negative note this week with investors resortingto profit-taking. With coalition partners showing dissatisfaction overpolicies of the PTI-led Govt., lackluster momentum prevailed. Furthermore,concerns over rising inflation kept the sentiment weak.
Whereas, overwhelming response to the Treasury Bill Auction (bids over PKR1.1trn), cushioned the dip. Albeit, the market closed at 43,168 points,(down by 0.1% / 39 points WoW). Sector-wise positive contributions camefrom Commercial Banks (109pts), Automobile Parts & Accessories (29pts),Automobile Assembler (20pts), Refinery (20pts), and Textile Weaving(12pts). Whereas, negative sector-wise contribution came from Oil & GasExploration Companies (96pts) and Power Generation & Distributiontions wereled by MEBL (31pts), HBL (28pts), THALL (25pts), BYCO (21pts) and HMB(18pts). Foreign buying continued this week clocking-in at USD 2.8mncompared to a net buy of USD 7.0mn last week.
Buying was witnessed in E&Ps (USD 1.4mn) and Fertilizer (USD 1.3mn). Onthe domestic front, major selling was reported by Insurance Companies (USD2.8mn) and Individuals (USD 2.2mn). Average Volumes settled at 246mn shares(down by 19% WoW) while average valuetraded clocked-in at USD 49mn (down by38% WoW). Other major news: HyundaiNishat begins truck production, Govtapproves 121 gas schemes, SECP to relax major condition under IPOregulations, International tender floated for auction for 18 new blocks,Car sales plunged by 43.2% during First Half 2019-20, and SBP imposespenalty on five banks.
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Analysts expect the market to be positive in the upcoming weeks assentiments should reflect improvement in foreign exchange reserves of theSBP and stable Pak Rupee/USD parity amid inflows in T-bills and narrowingCAD. Albeit, commencement of the financial result season in the coming weekwill keep certain scrips under limelight.
The KSE-100 index is currently trading at a PER of 7.6x (2020) compared toAsia Pac regional average of 12.5x and while offering DY of ~6.3% versus~2.7% offered by the region.
