PSX likely to carry forward positive momentum this week

Staff Reporter 

The Pakistan Stock Exchange (PSX) is likely to carry forward the positive momentum gained during the past two sessions in the week starting today (Monday) due to $2.77 billion receivable from International Monetary Fund (IMF), reduced geopolitical uncertainty, falling global commodity prices, ease in the coronavirus cases, and the ongoing results season.

According to analysts, a decline in infection ratio of the novel coronavirus in Pakistan and slowdown in global oil prices would release pressure from external accounts.

“Going forward, we expect the market activities to remain upbeat, owing to the reduced geopolitical uncertainty; therefore, we recommend our investors to take exposure in cements, steel, and auto sectors,” a report issued by Pearl Securities noted.

During the last week, the benchmark KSE-100 Index gained 429.98 points (+0.91 percent) to close at 47,599.82 points, while the KSE-30 Index gained 247.79 points (+1.3 percent) to close at 19,103.04 points.

The benchmark KSE-100 Index is currently trading at a PER of 6.7x (2021) compared to Asia Pacific regional average of 16.1x while offering a dividend yield of 6.6 percent versus 2.4 percent offered by the region.

Investors’ participation remained dull, as average daily traded volume declined 13 percent to 266 million shares per day, while the value of traded securities averaged at $70 million per day.

Foreign funds and investors offloaded stocks worth $10.82 million during the last week, compared with net buying of $3.95 million in the corresponding week. On the local front, buying was reported by companies ($7.78 million) followed by mutual funds ($5.87 million).

Cement companies in the south region increased prices by Rs25/bag effective from Friday last, which led to a rally in the sector on the last trading day of the week where several cement scrips closed at their upper circuits.

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