KARACHI-UNS – The capital market is expected to be driven by political developments and the continuation of the earnings season next week.
Mainly investors would bet on the cement companies where they are likely to report better earnings on higher sales, said an analyst from Ismail Iqbal Securities.
The KSE-100 Index commenced on a steady note during the outgoing week as political dust settled with the new incumbents most likely to take oath in the coming week. However, throughout the week the domestic equity bourse remained range bound as concerns over the widening current account deficit and dwindling reserves have yet to be resolved.
Pakistan Stock Exchange index showed marginal rise of 337 points or 0.8 percent to close at 42842 points. Volumes during the week settled at 208 million shares, down by 27 percent compared to preceding week while value traded arrived at $78 million, showing a fall of 19 percent on week on week basis.
Sector-wise positive contribution came from the following:
i) Cement contribution in index was 216 points on the back of reduction in coal price.
ii) Oil and Gas Marketing Companies adding 60 points on expectation of better financial results,
iii) Auto Assembler contribution was 57 points on double digit growth in auto sales during the first month of new fiscal year.
Foreign selling continued this during the outgoing week clocking-in at $38.6 million compared to a net sell of $14.6 million last week. Selling was witnessed in Exploration and Production $13.8 million and Commercial Banks $10.6 million.
On the macro front another development gave peace of mind to investors was the approval of $4 billion loan for Pakistan by the Islamic Development Bank to rescue its economy from ailing. Moreover, National Savings move to issue investment certificates.
The proposed diaspora bond is expected to be a three years and five years maturity. Expected amount has been around 500 million dollars to 1.2 billion dollar bond, priced at an attractive will be between 6 to 7 percent.
Furthermore, BMA Capital Management expect investors are likely to keenly track the upcoming administration’s response in dealing with balance of payments issues where any positive news on potential inflows from multilateral institutions, friendly countries or both may be welcomed by market participants.
Furthermore, a number of blue chips to announce financial results in the coming week where better than expected results may trigger rally in select scrips/sectors.